PayPal and eBay employees started receiving their layoff notices this week, following last month's announcement that the company would be terminating 2,400 employees. The 2,400 jobs will mean a 7 percent cut of the company's global workforce.
PayPal laid off several employees in sales and products because of the failure of PayPal Here, a credit card reader and other in-store payment schemes, according to the Re/Code. EBay will spin off PayPal into its own company later this year and the cuts will "scale back" less successful ventures.
Despite the cuts to sales and products, the layoffs will likely affect all departments because the PayPal is attempting to "refocus on its core Web and in-app payments" under its new chief executive, the Re/Code reported. The cuts at eBay were more unclear, but would be in both eBay Marketplaces and eBay Enterprise.
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PayPal's layoffs aren't surprising because of PayPal's lack of traction in the retail payments market. A credit card reader isn't going to impress anyone who can use a smartphone to pay for groceries. Cutting costs is also often a way to make a company more attractive to buyers, so PayPal's "spin-off" as a separate company comes at an interesting time.