According to PayPal, it is "becoming a technology company again." AI is implied
PayPal is focusing on a major transformation as it deals with falling stock prices and upcoming layoffs. During its first-quarter earnings call, CEO Enrique Lores said the company needs to return to its core strengths and “become a technology company again.”
The company is now betting heavily on artificial intelligence (AI) to drive its turnaround. Lores said PayPal will modernize its technology platform, move faster toward becoming cloud-based, and adopt AI across its development processes to boost productivity and reduce time to market.
So far, PayPal has been slower than other tech companies in adopting AI, especially in areas like AI-assisted coding. Now, it is trying to catch up by forming a new “AI transformation and simplification” team to lead these efforts.
As part of its restructuring, PayPal also plans to cut around 20% of its workforce over the next two to three years — more than 4,500 jobs — according to reports. The company expects this move, along with AI adoption, to save about $1.5 billion in costs.
PayPal is reorganizing its business into three main segments:
- Checkout solutions and core PayPal services
- Consumer financial services, including Venmo
- Payment services and cryptocurrency operations
AI will not only be used in coding but also in customer service, support operations, and risk management.
Despite reporting first-quarter revenue of $8.4 billion (up 7% year-over-year), PayPal gave a weak forecast for the next quarter. This led to a drop in its stock price, continuing a decline of over 80% from its 2021 peak.
When asked about the future of Venmo, Lores said there are no immediate plans to sell it but did not rule out potential deals, adding that his top priority is to maximize shareholder value.
The company’s shift toward AI and cost-cutting highlights a growing concern: while AI can improve efficiency, it may also lead to significant job losses.
