A Monday press release didn't go into deep specifics about the restructuring plan, which is meant "to simplify and speed up how products are developed." Nine PayPal product groups will be streamlined into "a single, more agile organization."
About 325 full-time PayPal employees, mainly in the product and tech sectors, were told Monday of the layoffs. PayPal is also cutting contracts with about 120 contractors, but it was unclear if they were also informed on Monday.
The 325 full-time employees being cut represent 2.5% of PayPal's full-time workforce of about 13,000. PayPal's parent company, eBay (Fortune 500), will take a $15 million charge in the fourth quarter for the job cuts. ,
The short press release mentioned its aim to expand the number of online merchant partners, and to drive "payments innovation at point-of-sale retail."
PayPal is feeling the crunch from upstarts like Square, a service backed by Twitter co-founder Jack Dorsey. Square lets small businesses swipe credit cards through a tiny device that attaches to a phone, in exchange for one flat fee of $275 per month, or 2.75% per swipe.
PayPal offers a similar card reader that charges 2.7% per swipe. Online transactions range from 2.2% to 2.9%, depending on how big the merchant is, plus 30 cents per swipe.
Just last month, daily deal site Groupon ( announced its )Payments service that aims to undercut the competition. Groupon Payments, which is available through an app for the company's merchants, charges 1.8% plus 15 cents per swiped transaction for MasterCard (Fortune 500), , Visa (Fortune 500) and , Discover (Fortune 500) cards. For , American Express (Fortune 500), it's 3% plus 15 cents per transaction. ,
|November jobs report: Unemployment falls to 7%|
|Fast food worker: Protest didn't cost me pay|
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Where should you put your money now?|
|End of mortgage-fix break could mean big tax bills|