Thread regarding PayPal layoffs

Interesting article, placing the summary here:

He appears to be applying a recognisably similar HP-style transformation playbook at PayPal, but adapted for a payments platform rather than a PC-and-print manufacturer.

The core pattern is the same: simplify the organisation, cut layers and duplicated work, modernise technology, use AI/automation to lower the cost base, set a multi-year savings target, and reinvest part of those savings into the products that can restore growth. The major difference is that PayPal needs this to improve product speed, checkout conversion, merchant relevance and user engagement—not merely protect profit margins.

The resemblance is unusually close. At HP, Lores promised $1.4bn in annualised savings; at PayPal, he has committed to at least $1.5bn in gross run-rate savings. At PayPal, management has said it has already identified about $400m of new annualised savings by the end of 2026.

Since taking over, his actions point to the same operating philosophy:

• Redrawn the company into three businesses: Checkout Solutions & PayPal; Consumer Financial Services & Venmo; and Payment Services & Crypto.
• Flattened management: PayPal said it is on track to remove three organisational layers, increasing managers’ spans of control and reducing decision-making delays.
• Launched a large cost-reset programme: at least $1.5bn in gross run-rate savings over two to three years, generated through organisation simplification, operational efficiency, technology modernisation and AI.
• Embedded AI in software development and operations: using AI throughout the development cycle to shorten production time and raise developer productivity—not only for customer-service chatbots.
• Created a dedicated AI/simplification leadership role: Anshu Bhardwaj was appointed Chief AI Transformation & Simplification Officer, signalling that the effort is a CEO-level operating programme, not a side innovation lab.
• Rationalised the portfolio: Lores has said PayPal needs to sharpen which products, markets and geographies it prioritises. That is comparable to HP’s portfolio optimisation, although it is not, so far, the same as selling a major PayPal business.

If he follows the HP model closely, I would expect five things.

1. A staged restructuring, not one final layoff event.
   At HP, the original plan was followed by added reductions when economic and cost pressures continued. At PayPal, the $1.5bn target runs across two to three years, so further waves of role reductions, office/geographic rationalisation and contractor/vendor reductions are plausible as the programme moves from design to execution. This is consistent with the stated timelines to simplify the operating model through 2027, improve marketing and productivity through 2028, and continue tech/AI modernisation through 2029.

2. Deeper simplification of overlapping technology and product teams.
   PayPal has accumulated many products, platforms and teams through years of acquisitions and separate product evolution. A Lores-style review would likely ask: which systems are duplicated, which product features do not create merchant or consumer value, and which teams can be consolidated once the platform is more cloud-native and AI-assisted.

3. Capital and portfolio discipline before a big sale.
   His HP record suggests a preference for improving and refocusing core businesses rather than rushing to sell them. At PayPal, that may mean scaling back peripheral investments, rationalising geographies or non-core initiatives, and reinvesting in branded checkout, Venmo, merchant services, risk/fraud capabilities and financial services. The company has already framed its reorganisation around precisely these core areas. newsroom.paypal-corp

4. Harder performance accountability.
   Three business units make it easier to see whether Checkout, Venmo/financial services, or payment services/crypto is growing profitably. It also makes future investment, leadership changes, or—if a unit persistently underperforms—potential partnership, restructuring or divestment decisions easier.

5. A “prove savings, then prove growth” investor narrative.
   HP’s plan was relatively successful as a cost-reset story. For PayPal, cost savings alone will not be enough. Investors will want evidence that the investment creates better checkout conversion, merchant retention, payment volume, Venmo monetisation and faster product releases. The real test is whether PayPal becomes more competitive against Stripe, Adyen, Block, Apple Pay and other payment options—not whether it merely has fewer employees.

HP could use cost discipline to defend a mature hardware business. PayPal operates in a faster-moving platform market where consumer behaviour, merchant adoption, fraud, regulation and AI-led commerce are changing quickly.

So the risk of copying HP too literally is cutting too deeply in engineering, product, risk or customer support and accidentally weakening the service at precisely the moment PayPal needs faster innovation. The benefit, if Lores executes well, is that removing slow decision-making and fragmented technology could let PayPal deploy new features faster and spend more on the areas that matter most.

Bottom line

Lores is not just likely to use the HP playbook—he is already using its central mechanics: a public multi-year savings target, workforce/management-layer reduction, operational simplification, AI-enabled productivity and reinvestment into strategic growth areas.

What remains unproven is the part that matters most for PayPal: whether the restructuring turns into sustainable revenue and product momentum, rather than becoming only a cost-cutting programme.

EL is truly the worst. No plans, no innovation, no common, and the list goes on. I think the board hired this guy as a joke.