Paypal has proposed cutting costs by $900 million, primarily through project delays, real estate consolidation, and layoffs. Additionally, PayPal unveiled a new $15 billion stock buyback program.
PayPal’s about-face on costs and the new stock repurchase plan was applauded by investors, and shares rose by 9%.
However, other experts are concerned that PayPal’s cost reductions are so significant that long-term revenue growth may be in jeopardy, posing a significant challenge for the business.
PayPal’s cost-cutting measures follow another hard quarter for the company.
According to recent reports, PayPal has changed its strategy to placate activist investor Elliott Management, which has revealed a $2 billion position in the payments industry giant.