On Tuesday, Visa, the American multinational financial services corporation, announced plans to reduce approximately 7% of its workforce, which equates to around 2,600 positions. This move is part of the restructuring efforts led by CEO Ryan McInerney to enhance operational efficiency within the company.
In a staff memo on Tuesday, McInerney wrote, “I firmly believe that we are doing the right thing for Visa, our customers, and our partners as we continue to focus on improving efficiency across the entire company to reinvest in our most promising opportunities.”
McInerney emphasized the need for Visa to continually evolve its operational practices to seize growth opportunities and stay ahead in the industry transformation, with artificial intelligence (AI) playing a crucial role in accelerating this transition.
However, according to Bloomberg, a source familiar with the reasons behind Visa’s decision revealed that while the company plans to leverage AI to reduce repetitive tasks and expedite product development, this is not the sole driving force behind the workforce reduction.
The source mentioned that Visa intends to reinvest in consumer payments, business payments, liquidity solutions, and value-added services, including stablecoin payments, cross-border payments, and business-to-business payments.
A company spokesperson confirmed the relevant details outlined in the memo.
The layoffs primarily impact the technology and product teams. As of the end of the previous fiscal year, the company employed around 34,100 individuals, more than triple the workforce size from a decade ago.
This marks the latest initiative undertaken by the payment processing giant to enhance operational efficiency in response to the increasingly fierce competition in the payment industry. Approximately six months ago, the company’s major competitors also took similar actions.
Earlier this year, Mastercard announced plans to cut around 4% of its global workforce, aiming to reallocate investments into different areas. In February, financial technology company Block indicated a reduction of nearly half of its staff, equivalent to approximately 4,000 positions.
On Tuesday morning at 8:47 am, Visa’s stock price rose by 2.1% in pre-market trading to $370. As of Monday, the stock has grown by 3.4% year-to-date, trailing behind the 3.8% increase in the S&P 500 Financials Index consisting of 76 component companies.
Visa is set to release its quarterly earnings after the U.S. stock market closes on Tuesday.
(This article is based on Reuters reporting)