- PayPal just laid off its emerging technologies research team, Insider has learned.
- The team oversaw R&D for cryptography, quantum computing, and distributed ledger technology.
- The payments giant is undergoing a restructuring that will see it consolidate teams to slash spend.
PayPal has laid off its security R&D team focusing on emerging technologies, Insider has learned. And a source with direct knowledge of the cuts believes it won’t be the only unit to be affected as the payments giant undergoes an internal restructuring to cut spend.
“There’s a lot of restructuring, a lot of refocusing for the company. As you know, the last quarters haven’t been really great from a financial perspective. I think there’s a lot of tightening going on in the company,” said the source, who asked to remain anonymous for fear of retribution. The source added that employees in other advanced security topics, such as threat intelligence, were also let go.
A PayPal spokesperson confirmed the emerging technologies research team was laid off, adding that it “was not a near-term business.”
All four team members — three employees and one contractor — were let go around April 1. The team was responsible for researching how the payments giant could use advanced technologies for security, such as quantum computing, cryptography, and distributed ledger technology. One such initiative, in which PayPal partnered with IBM, was centered around using quantum computing and machine learning to parse through large data sets to detect fraud — but many of the benefits were theoretical and had yet to be proven, as is the case with many quantum computing-initiatives in financial services.
The team fell under the purview of the information security org, which has also seen personnel changes recently. John Nai, PayPal’s CISO since 2014, retired this February and was replaced by Assaf Keren, who stepped into the role in January, according to LinkedIn.
“As you have a new CISO, there’s always a lot of reorganization at big companies,” the source said. “Obviously there’s more going on because of the overall market, the overall economic conditions,” they added.
PayPal stock has steadily fallen to hang around $110 per share, from a record high of $308 in July 2021. The firm added 122 million new active accounts in the past two years with the number of transactions per active account also increasing, CEO Dan Schulman said during the company’s fourth-quarter earnings call in February.
But market conditions, like supply chain issues and rising inflation, have put downward pressure on growth, Schulman said. Meanwhile, eBay’s migration to managing the end-to-end payments process “put $1.4 billion of pressure on our top line,” Schulman said during the earnings call. Competition from fintechs like Stripe and Shopify also continues to saturate the payments and e-commerce space.
PayPal provided Insider with the following comment:
“PayPal is constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve. The company remains committed to delivering great products and services for our customers. Any steps related to aligning our workforce would be done responsibly and would provide a level of benefits, resources, notice, and support that aligns with our values.”