PayPal Cuts Over 20% of Israeli Workforce in Global Efficiency Drive
Translated & summarized from Bizportal by baba
PayPal is laying off approximately 70 employees, over 20% of its Israeli workforce, as part of a global initiative to cut 20% of its staff and achieve $1.5 billion in annual savings. The cuts are driven by a need for efficiency and increased AI integration amid growing competition in the payments sector.
The story in 5 lines · by baba
- PayPal is cutting over 20% of its Israeli staff, around 70 employees.
- This is part of a global plan to reduce workforce by 20% over 2-3 years.
- The goal is to save $1.5 billion annually through efficiency and AI.
- The Israeli center focuses on fraud prevention, risk management, cyber, data, and AI.
- The layoffs occur amid increased competition in the payments market.
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.
