Reports: PayPal Plans Job Cuts
PayPal, the financial subsidiary of leading online auction site eBay (NAS: EBAY) , is reportedly planning to cut 300-400 jobs. A Reuters report cites an unnamed person "familiar with the situation" revealing the news and a Bloomberg report cites an unnamed "person with knowledge of the plans."
PayPal employs 13,000 people , so 400 jobs would be 3% of that total.
The division is headed by David Marcus, who was appointed in April, not long after PayPal acquired his mobile payment company Zong. PayPal has been facing intensified competition of late from upstart rivals such as mobile payment provider Square.
In 2011, Paypal brought in 41% of eBay's overall net revenues, up from 34% only two years earlier. The unit's sales are growing faster than that of eBay's core auction business, increasing net revenues by 56% compared to the latter's 22% from 2009 to 2011.
In a statement quoted by Bloomberg, eBay sidestepped the issue by saying "We have told PayPal employees about plans under way to strengthen and simplify how we create and deliver consistently great products and brand experiences to our customers. We have not yet discussed how these plans may impact any existing jobs across our product, technology and marketing teams."
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