Payment firm PayPal Holdings Inc. is set to cut seven percent of its workforce, or about 2,000 employees.
"While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do," the firm's CEO Dan Schulman said in a statement.
The company's stocks have been deeply impacted by the downturn in the volumes of payments through its platform while the world eases out of the Wuhan coronavirus (COVID-19) pandemic. This is why it is now resorting to reduced spending that would include closing down offices across the U.S. and laying off employees.
Schulman said these efforts should help the company save at least $1.3 billion this year. The South China Morning Post reported that PayPal shares increased 1.9 percent to $81.14 on Feb. 1 at 3:55 p.m. New York time. The stock has climbed 14 percent this year, outpacing the nine percent advance of the S&P 500 Information Technology Index.
Just like other tech companies, the financial portal hired more employees during the pandemic to keep up with the demand for online payments due to public health mandates such as lockdowns.
And though there has been an increase in payments via their services this year as compared to last year, that would still mark the lowest level of growth in the firm's history as a public company.
"Over the past year, we made significant progress in strengthening and reshaping our company to address the challenging macroeconomic environment while continuing to invest to meet our customer's needs," Schulman said. "We must continue to change as our world, our customers and our competitive landscape evolves."
PayPal hack exposes personal information of nearly 35,000 customers
The mass layoff came a few weeks after PayPal got hacked and had the personal information of about 35,000 customers exposed, including their names and Social Security numbers (SSNs). The hackers used a method called "credential stuffing," which involved automatically injecting login credentials that were found during previous data breaches.
The company sent a notice of the data breach on the website of Maine's Office of the Attorney General. It also sent a letter about the data breach to its 34,942 impacted users. (Related: PayPal hack exposes names, social security numbers of 35,000 customers.)
"On Dec. 20, 2022, we confirmed that unauthorized parties were able to access your PayPal customer account using your login credentials. We have no information suggesting that any of your personal information was misused as a result of this incident, or that there are any unauthorized transactions on your account. There is also no evidence that your login credentials were obtained from any PayPal systems," the letter reads.
The hacking activity occurred between Dec. 6 and Dec. 8, 2022, when it eliminated access for unauthorized third parties, which it did not identify. During this time, third parties were able to view and potentially acquire personal information for certain users, such as full names, dates of birth, SSNs, addresses and tax identification numbers.
PayPal suggested additional security features that enable the "two-step verification" in the account settings. "When links are present in an email, individuals should hover [their] mouse over the links to view the actual destination URL and should not click on the link if [they] are unsure of the destination URL or website," the firm also suggested.
The company assured its users that on their end, they have already reset passwords. Affected users will also get free identity monitoring services from Equifax, a consumer credit reporting company.
Visit Glitch.news for more stories about hacking incidents.
Watch this video of a PayPal user revealing that the platform linked an SSN to his account without his consent.
This video is from Cahlen's channel on Brighteon.com.
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