eBay’s payment platform PayPal has announced the cut of 325 jobs and the end of 120 contracts with private contractors as a result of a product reorganisation strategy.
PayPal said that the measure follows the decision to collapse nine lines of products into one, with the intent to "simplify and speed up how products are developed". According to the Wall Street Journal, the cuts equal 2.5% of PayPal’s workforce.
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"We are creating agile teams of designers, engineers and product managers. Instead of being organized around projects, our teams will now be dedicated to products and focused on our customers — consumers, developers, small businesses and large retailers," said PayPal president David Marcus in a blog.
PayPal expects the measure to cost USD15m before tax in the fourth quarter of 2012. The eBay subsidiary posted a 23% year-on-ear increase in net revenue in the third quarter to end 30 September 2012, with revenues reaching USD1.4bn.
PayPal has recently launched a series of products marking the expansion of its e-commence platform into the brick-and-mortar world. In February 2012, the company rolled out its first prepaid card in partnership with MasterCard. And in March 2012, PayPal launched PayPal Here, a Square-style mPOS device allowing merchants to process card payments through their smartphones.
In June 2012, PayPal started an in-store payment service in the UK, allowing customers to download an app and have their shopping debited onto their PayPal accounts for purchases made at selected high street retail outlets.
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By GlobalDataIn August 2012, PayPal announced a partnership with US card network Discover to allow account holders to make payments at 7m US point-of-sales accepting Discover cards. In Europe, it started a contactless payment trial in 30 French McDonald’s restaurants.
PayPal was unavailable to comment on the significance of the cuts for its expansion outside the e-commerce environment. In a statement, PayPal said the company will continue to grow "by driving payments innovation at point-of-sale retail for large, medium and small businesses, and by engaging consumers online and offline with payments products and experiences that offer choice, flexibility, simplicity and security".
