PayPal is making a bold move to reshape its future by focusing on becoming a technology-driven company again. Despite recent struggles like falling stock prices and layoffs, the company is betting big on artificial intelligence. During its first-quarter earnings call, CEO Enrique Lores emphasized that innovation and modernization are key to staying competitive.

PayPal’s New Focus on AI and Tech Modernization

Lores stated that PayPal needs to “recommit to the fundamentals,” which now includes adopting AI more aggressively. The company plans to modernize its tech platform, becoming more cloud-native and speeding up development processes. An important part of this shift is integrating AI into various parts of the business to improve efficiency and innovation.

Interestingly, PayPal has admitted it has yet to fully integrate AI into its operations, despite the technology’s rapid adoption elsewhere. Other tech giants and startups have already started using AI to assist coding and improve workflows. For example, Spotify recently revealed that its top developers haven’t written code since December, thanks to AI tools. PayPal is now catching up, forming a new “AI transformation and simplification” team to lead this effort.

Cost Savings and Workforce Changes through AI

Alongside its focus on AI, PayPal is also restructuring internally. The company announced a reorganization into three main segments: checkout solutions and PayPal, consumer financial services including Venmo, and payment services with crypto. These changes aim to streamline operations and boost efficiency.

As part of its cost-cutting strategy, Bloomberg reported that PayPal plans to reduce its workforce by around 20% over the next two to three years, which could mean over 4,500 jobs lost. The company sees AI as a way to cut costs beyond layoffs, applying it to customer support, risk management, and other areas to improve processes and save at least $1.5 billion in the coming years.

CEO Lores emphasized that this AI-driven transformation is about redesigning key processes to achieve significant savings. However, the move also highlights a common concern about the human cost of automation and cost-cutting. Despite these changes, PayPal posted decent earnings of $8.4 billion in the first quarter, up 7% year-over-year, though it issued weak guidance for the next quarter, causing its stock to decline. The company’s stock has dropped over 80% from its 2021 high, reflecting ongoing challenges in growth and market confidence.

PayPal is also considering its strategic options for Venmo. While it currently plans to keep Venmo as part of its core business, CEO Lores hinted that future deals could be on the table, emphasizing that maximizing shareholder value remains a top priority. Overall, PayPal’s renewed focus on AI signals a major shift aimed at revitalizing the company and staying competitive in a fast-changing tech landscape.

Inspired by

• https://techcrunch.com/2026/05/05/paypal-says-its-becoming-a-technology-company-again-that-means-ai/

Sources

• pypl.com
• bloomberg.com
• marketwatch.com
• seekingalpha.com