PayPal CEO Enrique Lores has this week told managers that he is reorganizing the firm's reporting lines to separate Venmo, the popular mobile payments app, from the company's other operations, CNBC has learned exclusively.
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, said people with knowledge of the changes.
PayPal is looking to recruit a digital banking executive to run the new Venmo segment, said the people, who asked not to be named because they weren't authorized to speak publicly
The other two segments will be a PayPal-branded business for merchants and consumers and a payment services unit that includes its Braintree unit and crypto operations, the people said.
Lores, who spent six years as CEO of computer maker HP before stepping in as PayPal CEO in March, is betting that a sharper corporate structure can reignite growth at a company that has lost ground to 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 roughly 80% from its pandemic-era peak.
PayPal's precipitous share decline has attracted interest from potential bidders, including rival Stripe, for parts or all of the company, Bloomberg reported in February. The firm has hired bankers to gird itself against takeover bids or activist campaigns, according to Semafor.
PayPal declined to comment for this story.
Shares of PayPal spiked roughly 3% following publication of CNBC's report.
Job cuts in limbo
The structural changes come mid the looming threat of a broad round of layoffs like those seen at payments rival Block. Earlier this year, PayPal managers were tasked by former CEO Chriss to come up with 15% head count reductions, but that effort was left in limbo when Chriss was replaced, said one of the people.
Venmo, with its nearly 100 million users, is viewed as arguably PayPal's most valuable standalone asset because of its growth prospects. Analysts have said it is a key target for potential acquirers and could attract a premium valuation.
Amid the changes, two key executives, Diego Scotti, who ran the consumer group that included Venmo, and Michelle Gill, who oversaw a small-business group that is being dissolved, are departing, the people said. Scotti and Gill didn't immediately respond to requests for comment.
The firm will also stand up a new artificial intelligence transformation group led by Anshu Bhardwaj, a former Walmart tech executive, according to the people. A financial services unit that supports the other main business segments will be run by Scott Young, a former Goldman Sachs consumer banking manager, the people said.
PayPal reports first-quarter results next week.
Facts Only
PayPal CEO Enrique Lores is reorganizing the company’s reporting structure.
Venmo will become a standalone segment within PayPal.
PayPal is recruiting a digital banking executive to lead the new Venmo segment.
Two other segments will be created: a PayPal-branded business for merchants and consumers, and a payment services unit including Braintree and crypto operations.
Lores became PayPal CEO in March, replacing Alex Chriss.
PayPal’s stock has fallen roughly 80% from its pandemic-era peak.
Venmo has nearly 100 million users.
Two executives, Diego Scotti and Michelle Gill, are departing.
Anshu Bhardwaj, a former Walmart tech executive, will lead a new AI transformation group.
Scott Young, a former Goldman Sachs consumer banking manager, will oversee a financial services unit.
PayPal’s shares rose roughly 3% after the reorganization was reported.
PayPal reports first-quarter results next week.
Executive Summary
Full Take
The strongest version of this narrative frames PayPal’s restructuring as a strategic pivot to unlock value, particularly in Venmo, while addressing stagnant growth and competitive pressures. The separation of Venmo could signal preparation for a sale, a move that might appeal to investors given its user base and growth potential. However, the timing—amid leadership turnover, unresolved layoff plans, and stock declines—raises questions about whether this is a genuine growth strategy or a defensive maneuver to fend off activist investors or acquirers like Stripe.
Patterns detected: none
The root cause appears to be a classic corporate response to underperformance: restructuring to create the illusion of control and clarity. The unstated assumption is that Venmo’s value is best realized independently, either as a standalone business or as an acquisition target. This echoes historical patterns where companies carve out high-growth units to appease markets or attract buyers, often at the expense of long-term integration.
For human agency, the implications are mixed. Employees face uncertainty as layoffs loom and executives depart, while consumers may see little immediate change. The second-order consequences could include accelerated competition in digital payments, with Venmo potentially becoming a battleground for tech giants.
Bridge questions: What would it mean for Venmo’s users if the app were sold to a competitor like Stripe? How might this restructuring affect PayPal’s ability to innovate in core payments? Could this be a prelude to a broader breakup of PayPal’s businesses?
Counterstrike scan: If this were a coordinated influence campaign, the playbook might involve leaking restructuring plans to boost stock prices temporarily while downplaying internal instability. However, the content aligns more with standard corporate communications than a manipulative strategy, as the uncertainties and challenges are acknowledged rather than obscured.
Sentinel — Human
The text exhibits the structure and vocabulary of professional financial reporting, relying on aggregated information rather than creating novel, unsupported claims.