PayPal says it’s ‘becoming a technology company again.’ That means AI.
Source: TechCrunch
PayPal is looking towards the future, despite its falling stock and looming layoffs. In its first‑quarter earnings call, CEO Enrique Lores told investors that PayPal needs to “re‑commit to the fundamentals,” which includes “becoming a technology company again.”
Lores explicitly said the company will modernize its tech platform, move faster to become “cloud‑native,” and aggressively adopt AI in its development processes. He expects AI‑enabled processes to increase developer productivity, shorten time‑to‑market, and generate at least $1.5 billion in cost savings over the next two to three years.
AI‑Driven Turnaround
AI in Development
Lores emphasized that “aggressively adopting AI in our development processes” will boost developer productivity and shorten time‑to‑market. This marks a shift for PayPal, which has yet to fully embrace AI in‑house, even as AI‑assisted coding has become a breakout area for many tech firms.
Example: Spotify announced in February that its top developers haven’t written a line of code since December, thanks to AI‑driven tools. Top dev teams are also competing by “token‑maxxing,” a proxy for how frequently they experiment with AI based on the number of AI tokens they consume.
AI Transformation Team
PayPal has formed a new “AI transformation and simplification” team reporting directly to Lores. The team will drive AI adoption function by function, process by process, extending beyond coding to customer service, support operations, and risk management.
“I think the changes that AI will enable us to do are going to be very significant… It’s really about understanding how we can redesign the key processes… this is what we have seen that really will drive significant savings.” – Enrique Lores
Organizational Changes
Strategic Reorganization
The company announced a reorganization that streamlines operations into three segments:
- Checkout solutions and PayPal
- Consumer financial services (including Venmo)
- Payment services and crypto
Workforce Reductions
According to Bloomberg, PayPal plans to cut around 20 % of its workforce (north of 4,500 jobs) over the next two to three years as part of its cost‑savings plan. Lores framed the layoffs as “removing layers from its organizational structure.”
Financial Outlook
PayPal beat first‑quarter expectations with revenue of $8.4 billion, up 7 % year‑over‑year. However, the company forecast weak guidance for the second quarter, sending the stock tumbling. The stock has declined over 80 % from its 2021 high, reflecting a prolonged post‑pandemic slump.
When asked about the possibility of separating Venmo into its own business, Lores said the current structure makes the most sense for the turnaround plan but left the door open to future deals, emphasizing that “my number one priority is to maximize shareholder value.”