PayPal Cuts Over 20% of Israeli Workforce in Global Efficiency Drive

PayPal is laying off more than 20% of its employees in Israel, impacting approximately 70 workers out of its local staff of 300. This reduction is part of a global efficiency program announced by the company two months ago, aiming to cut about 20% of its worldwide workforce over two to three years. Globally, PayPal employed around 23,800 people at the end of 2025, meaning nearly 5,000 jobs are expected to be eliminated.

The initiative, spearheaded by CEO Enrique Lores who took office in March, seeks to achieve annual savings of approximately $1.5 billion. The plan involves streamlining management layers, eliminating redundancies, and reducing staff. A key component is the increased use of artificial intelligence in areas such as customer service, support, risk management, and development processes. PayPal previously outlined this efficiency and AI acceleration plan in May, estimating that some identified measures could yield $400 million in annual savings by the end of 2026. The company anticipates restructuring costs of $130-140 million in the second half of the year.

The significant cut in Israel is partly due to the nature of its local operations. The Israeli development center focuses on crucial areas like fraud prevention, risk management, cyber security, data, and AI. PayPal's presence in Israel was built over time through acquisitions, notably ProdSense in 2008 for $169 million. Despite the layoffs, PayPal recently acquired Simbo this year, which operates in e-commerce and brand-to-platform connectivity, indicating continued investment in technology and future-oriented fields while simultaneously reducing existing structures.

This restructuring comes amid moderate growth for PayPal and increasing competition in the payments market from rivals like Apple Pay, Google Pay, and Stripe. While PayPal processes nearly $2 trillion in payments annually and generates over $30 billion in revenue, its recent second-quarter earnings showed a modest 5% revenue increase to $8.68 billion. The company has also raised its annual forecast. Earlier this year, there was speculation about a potential sale of PayPal, with offers reportedly made by Stripe and Advent, but these discussions did not materialize. The current efficiency plan, including the Israeli workforce reduction, is now the company's focus.