PayPal's new chief executive has broken the company into three distinct business segments, separating Venmo from the rest of the firm's operations in a move that makes the app easier to track, manage, or sell outright.
CEO Enrique Lores told managers this week about the reorganization, CNBC reported exclusively Wednesday. Venmo will become its own standalone segment. The other two will be a PayPal-branded unit serving merchants and consumers, and a payment services division housing the Braintree unit and crypto operations.
Lores has been in the role only since March, when he stepped in after Alex Chriss was replaced. Chriss, a former Intuit executive, had struggled to reverse a stock that fell roughly 80% from its pandemic-era peak. Lores spent six years as CEO of HP before taking the PayPal job, and is betting that a cleaner corporate structure can reignite growth at a company that has steadily lost ground to Apple, Google, and Stripe.
Venmo has nearly 100 million users and is widely considered PayPal's most valuable standalone asset. Analysts have long said it could command a premium valuation from an outside buyer. PayPal's share decline has already drawn attention from potential acquirers, including Stripe, which Bloomberg reported in February had expressed interest in parts or all of the company. The firm has also hired bankers to prepare against takeover bids or activist campaigns, according to Semafor.
PayPal is now recruiting a digital banking executive to run the new Venmo segment, according to people familiar with the matter who asked not to be named because they were not authorized to speak publicly. The search itself signals how seriously leadership is treating the unit as a distinct, standalone business.
Two senior executives are departing as part of the restructuring. 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 leaving the company.
Lores is also standing up a new artificial intelligence transformation group, to be led by Anshu Bhardwaj, a former Walmart technology executive. A financial services unit supporting the other main segments will be run by Scott Young, a former Goldman Sachs consumer banking manager.
The structural changes arrive alongside unresolved questions about headcount. Earlier this year, managers under former CEO Chriss were directed to develop plans for 15% workforce reductions. That effort stalled when Chriss departed, and it remains unclear whether Lores will revive, scale back, or abandon those cuts.
Shares of PayPal jumped roughly 3% after CNBC published its report Wednesday. The company declined to comment. PayPal is scheduled to report first-quarter earnings next week, where Lores will face questions about the new structure and the company's growth trajectory.
