Even well-funded fintech companies are laying off workers

Greetings from Austin, Texas, where an ice storm hit last week and caused widespread damage across the city. I know, I know — Austin is known for its 100+ degree temperatures in the summertime. Who would have expected this to happen here? And not just once but twice in two years. Surely not I, when my family moved here in 2013. We’re going on Day 5 with no power, heat or internet. That’s why this newsletter is being published a day later than it would have under normal circumstances. Our neighborhood has many beautiful mature trees, including many oaks. It’s one of the things we loved most about it when deciding to live here. It’s also the same reason our neighborhood was hit SO hard by this storm. Branches from one of those trees fell on our power line, making the outage not just inconvenient but also scary. While this has been extremely stressful — my 89-year-old mother lives with us and our biggest priority has been trying to keep her warm and comfortable — there have been bright spots, like the kindness of a neighbor I’d never met before sharing a wheelchair so I could transport my mother somewhere else and a friend who offered a portable generator so that we could at least have some power for a little while. Anyway, hopefully by the time I’m writing this next week, we’ll have our actual power back. Fingers crossed.

The layoffs keep coming

There appears to be no end in sight for layoffs in the fintech space. PayPal was the latest large company to announce layoffs — with about 2,000 full-time employees, or 7% of its workforce, affected. On January 30, the payments giant publicly shared a letter that president and CEO Dan Schulman had sent to employees in which he noted the cuts would take place over the coming weeks “with some organizations impacted more than others.” Schulman added: “Over the past year, we made significant progress in strengthening and reshaping our company to address the challenging macro-economic environment…While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do. We must continue to change as our world, our customers, and our competitive landscape evolve.”

He did not provide further details, saying only the company would provide the affected “with generous packages, engage in consultation where required, and support them with their transitions.”

The company’s stock perked up on the news. After closing at $79.64 on January 30, shares closed up 7.4% at $85.52 on February 3.

It’s not the first round of layoffs for PayPal in recent times. Last spring, TechCrunch reported that PayPal had laid off dozens of employees from its San Jose headquarters around a week before the fintech confirmed that it was shuttering its San Francisco office. To better understand why it matters so much to us what publicly traded companies like PayPal do, head here.