PayPal reduces Israel workforce as company seeks $1.5 billion in savings

American payment services giant PayPal is laying off 70 employees in Israel from its local workforce of 300 as part of a restructuring announced in May by the company’s new CEO Enrique Lores.

The cut will hit the Tel Aviv development center, which develops artificial intelligence systems to analyze transactions in real time, detect fraud, prevent money laundering, and monitor the company’s user experience and mobile applications.

Lores’ global efficiency plan involves structural changes and includes a major reduction in the company’s workforce, including at the management level, as it shifts its focus to AI integration.

It will see data scientists, software engineers, and product developers laid off.

When the restructuring was announced, Bloomberg said that the plan would involve laying off 20% of the company’s workforce, over 4,500 employees, and saving around $1.5 billion over the next few years.

Other locations hit by the restructuring plan include Ireland (164 layoffs), India (200 layoffs), and PayPal’s headquarters in San Jose, United States (251 layoffs).

PayPal was quoted in local media as saying that the cuts were part of the previously announced changes and are “designed to simplify our global operations and put the company on a path to long-term growth.”

“Decisions of this kind are not easy, and we are fully aware of their impact on our employees. We are committed to standing by them and providing them with full support during this period of change,” PayPal was quoted as saying.

The company said in April that it would also split its business operations into three divisions: product payments, consumer financial services through Venmo, and cryptocurrency payments.

The Financial news website reported that the company will also be closing its 10-year-old venture team, which has backed over 80 companies across three funds totaling more than $850 million.

PayPal had bought several Israeli companies and recently acquired Cymbio, a Tel Aviv commerce tech company, for an estimated hundreds of millions of dollars.

PayPal Ventures first invested in Cymbio in 2022.