- Key insights: PayPal is restructuring its business into a three-unit operating model and bringing in fresh talent as CEO Enrique Lores looks to turn the company around.
- What’s at stake: PayPal has missed numerous targets in recent quarters and struggled to adapt to the changing digital payments landscape, which led to the ousting of former CEO Alex Chriss in March.
- Forward look: The company said it planned on talking more about the reorganization on its May 5 earnings call.
PayPal’s new CEO Enrique Lores is changing the company’s structure in an effort to to
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The payments will have three units, including checkout solutions and PayPal, consumer financial services and Venmo, and payment services and crypto.
The reorganization comes less than two months after Lores took the reins from former CEO Alex Chriss, who was ousted in March after a series of stumbles that led to PayPal missing its targets. During that time, high-flying payments fintech
“To accelerate growth and unlock our full potential, we need to recommit to our fundamentals — getting much closer to the consumer, aligning the company around three strong businesses, simplifying how we work, sharpening accountability, and prioritizing operational excellence,” said Enrique Lores, president and CEO, PayPal. “By aligning our structure with our strategy in this simplified approach, we will be better equipped to drive sustainable growth and value creation for PayPal, our customers, and our shareholders.”
As part of the reorganization, PayPal made multiple staffing changes. Diego Scotti, who served as executive vice president and general manager, consumer group, and Michelle Gill, who served as executive vice president and general manager, small business & financial services group, will leave the company.
Meanwhile, PayPal promoted four people to new leadership roles, including:
- Frank Keller as president, checkout solutions and PayPal;
- Alexis Sowa as interim lead, consumer financial services and Venmo;
- Jeff Pomeroy as interim lead, payment services and crypto; and,
- Anshu Bhardwaj as chief AI transformation and simplification officer.
Antonio Lucio also joined PayPal from HP as chief marketing and corporate affairs officer.
The goal is to unify some of PayPal’s previously separate business lines. Its checkout solutions and PayPal business will combine consumer and merchant offerings, while its consumer financial services and Venmo business will work to expand more broadly into a holistic consumer financial services platform. And its payment services and crypto business will bring together value-added services, small- and medium-business processing, Braintree and crypto – including its stablecoin PYUSD – into a single offer for merchants.
The change in operating model follows Lores’ state priorities of getting close to the consumer, sharpening accountability and simplifying the company’s operations, according to a Keefe Bruyette and Woods research note.
“The reorganization follows CEO Enrique Lores’ stated priorities of getting close… effectively translating the strategic narrative from the past several quarters into an org chart,” KBW analyst Sanjay Sakhrani said in a research note. “The three-unit structure maps PayPal’s three customer constituencies: merchants seeking checkout optimization, consumers seeking financial services, and enterprise/SMB clients needing scalable payment infrastructure.”
The move also allows PayPal to provide investors with a better look at the company based on where it considers there to be greater value and could make certain areas of its business more visible if it decides to sell it, Sakhrani said.
“Ultimately we hope that any changes the company makes would be enhancing to a bar that is pretty low at this point in time,” Sakhrani said.
PayPal said it would provide more details about the restructuring during its earnings call on May 5.