Prime Highlights
- Venmo’s split into a standalone segment unlocks its potential as PayPal’s most valuable asset with 100 million users.
- PayPal shares jumped 3% as markets welcomed Lores’ bold restructuring plan.
Key Facts
- PayPal is a US-based digital payments giant whose portfolio includes Venmo, Braintree, and crypto operations.
- Enrique Lores took over as PayPal CEO in March, previously serving six years as CEO of HP.
Background
PayPal CEO Enrique Lores has told managers this week that he is restructuring the company’s reporting lines, separating Venmo from the rest of its operations. Venmo will become its own standalone segment, making it easier to track its performance — or potentially sell it to another company. PayPal shares climbed roughly 3% following news of the changes.
In the new structure, PayPal will have three segments to operate in: the Venmo segment on its own, the PayPal segment serving both businesses and consumers, and the third being the payments service segment, which comprises Braintree and crypto. The company is actively recruiting a digital banking executive to lead the Venmo segment. A new AI transformation group will be set up under Anshu Bhardwaj, a former Walmart technology executive, while a financial services unit will be led by Scott Young, a former Goldman Sachs consumer banking manager.
Two senior executives are leaving as part of the shake-up. Diego Scotti, who previously ran the consumer group that included Venmo, and Michelle Gill, who oversaw a small-business group that is being dissolved, are both departing.
Lores, who took over as PayPal CEO in March after six years leading HP, is betting that a leaner structure can revive growth at a company that has lost ground to Apple, Google, and Stripe. PayPal’s stock had fallen roughly 80% from its pandemic peak under his predecessor, Alex Chriss. The restructuring also comes amid an unresolved plan for 15% headcount reductions initiated under Chriss, which was left in limbo after his departure. Venmo, which has nearly 100 million users, is widely seen as PayPal’s most valuable standalone asset and a likely target for potential acquirers.
