Online payment pioneer PayPal said today it would cut 325 full-time jobs as the company owned by eBay seeks to streamline its operations and eliminate inefficiencies in the face of growing competition in the market.
PayPal, which had almost 13,000 employees earlier this year, would merge nine product development groups into one, Reuters reported.
"In a large company, at some point you reach the law of diminishing returns when more people means slower," PayPal president David Marcus was quoted as saying.
"You have a lot of duplication of roles with nine product groups merging into one.”
CNET reported PayPal would also shed 120 contractors.
Most of the job losses will be in the product and technology divisions.
EBay will be slugged with a pre-tax charge of $15 million in the fourth quarter as a result of the restructuring, Bloomberg reported.
EBay chief executive John Donahoe told a conference call that the job cuts were not designed to save money, but rather improve the customer experience.
“Customers want a seamless experience across the Web, online and offline,” Donahoe was quoted by All Things D as saying.
“While it’s true there will be reductions, we are committed to accelerating the pace of innovation. We aren’t seeking cost reductions – this is 100 percent about streamlining the creation of great products.”
PayPal, which started in the late 1990s, is known for “excessive meetings and months-long project approvals,” according to Bloomberg, which has hampered its ability to counter growing competition from payments start-ups such as Square, Stripe and Dwolla.
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