To strengthen its competitiveness in an increasingly fierce payments industry, Visa Inc. (V.US) CEO Ryan McInerney is working to streamline the company’s architecture, with plans to eliminate around 2,600 jobs.
According to an internal memo, on Tuesday McKinney informed employees that this round of layoffs would account for roughly 7% of the company’s total global workforce, mainly affecting the technology and product teams.
In the memo, he wrote: “I strongly believe we are making the right decisions for Visa, our customers, and our partners. We will continue to drive efficiency improvements across the company so that we can reallocate resources to business areas with the highest growth potential.”
It is reported that Visa is scheduled to release its quarterly earnings after the U.S. stock market closes on Tuesday. By the end of the last fiscal year, the company had a total of about 34,100 employees, more than double compared with ten years ago. Meanwhile, several financial technology competitors, including PayPal Holdings Inc. (PYPL.US) and Block Inc. (XYZ.US), have recently announced plans for layoffs on a larger scale.
On the back of this news, Visa’s share price rose by about 2% at one point during pre-market trading on Tuesday. As of the close of trading on Monday, the stock was up 3.4% year-to-date, slightly below the S&P 500 Financials Index (covering 76 constituent stocks), which gained 3.8% over the same period.
McKinney also noted in the memo: “To seize future opportunities and keep Visa at the forefront of this transformation, we must continue to drive the evolution of how we work. Artificial intelligence (AI) is also accelerating this change and reshaping Visa’s internal working models.”
According to people familiar with the matter, although AI is being used to reduce repetitive work and speed up product development, it is not the only driver behind this round of layoffs. Visa plans to reallocate the resources from the layoffs toward consumer payment, commercial, and money movement solutions, as well as value-added services, including stablecoins, cross-border payments, and business-to-business (B2B) operations.
In a memo, McKinney concluded: “The choices we have made over the past few years are propelling us into a new era in our business, and our business is showing strong growth momentum. This is reflected in our continued solid financial performance, customer satisfaction, employee engagement, and breakthrough innovation in product development and delivery speed.”