Enrique Lores, then CEO of Hewlett-Packard, speaks on CNBC outside the World Economic Forum in Davos, Switzerland, January 22, 2025.
Gerry Miller | CNBC
Paypal CEO Enrique Lores told executives this week that he is reorganizing the company’s reporting lines to separate Venmo, the popular mobile payments app, from the company’s other operations, CNBC has exclusively learned.
Venmo will soon be its own standalone segment within PayPal, making it easier to track its progress or potentially sell the business to another company, people with knowledge of the changes said.
PayPal is looking to hire a digital banking executive to manage the new Venmo segment, said the people, who asked not to be named because they were not authorized to speak publicly.
The other two segments will be a PayPal-branded merchant and consumer business and a payment services unit that includes its Braintree unit and crypto operations, the sources said.
Lores, who spent six years as CEO of computer maker HP before becoming CEO of PayPal in March, is betting that a stronger corporate structure can revive growth at a company that has lost ground Apple, Google and Stripe in the battle over e-commerce transactions. Lores replaced Alex Chriss, a former Intuit executive who struggled to revive a stock that had fallen about 80% from its pandemic-era peak.
The precipitous drop in PayPal shares has sparked interest from potential buyers, including rival Stripe, for part or all of the company, Bloomberg reported in February. The company hired bankers to guard against takeover bids or activist campaigns, according to Semafor.
PayPal declined to comment for this story.
Shares of PayPal rose about 3% after CNBC’s report.
Job cuts in the dark
The structural changes come amid the looming threat of a broad round of layoffs like those seen at its payments rival. Block. Earlier this year, PayPal officials were tasked by former CEO Chriss with proposing 15% workforce reductions, but that effort remained in limbo when Chriss was replaced, one of the people said.
Venmo, with its nearly 100 million users, is arguably considered PayPal’s most valuable standalone asset due to its growth prospects. Analysts said it was a key target for potential acquirers and could attract a premium valuation.
Amid these changes, two key executives, Diego Scotti, who led the consumer group that included Venmo, and Michelle Gill, who oversaw a group of small businesses being dissolved, are leaving, the sources said. Scotti and Gill did not immediately respond to requests for comment.
The company will also create a new artificial intelligence transformation group led by Anshu Bhardwaj, a former Walmart technical framework, according to people. A financial services unit that supports other core business segments will be led by Scott Young, former Goldman Sachs director of consumer banking, the people said.
PayPal will report its first quarter results next week.