PayPal Splits Into Three Units as Venmo Becomes Standalone Segment Amid Takeover Interest

PayPal CEO Enrique Lores has directed a sweeping corporate reorganization that separates Venmo into its own distinct business segment for the first time, a structural shift that comes as potential buyers — including rival Stripe — have circled the payments giant.

Lores, who took over as PayPal's chief executive in March after six years running computer maker HP, informed managers this week of plans to divide the company into three reporting segments, according to people with knowledge of the matter who were not authorized to speak publicly.

The first segment will house the Venmo app, which counts nearly 100 million users. The second will cover PayPal-branded products for merchants and consumers. The third will consolidate payment infrastructure services, including the Braintree unit and the company's crypto operations.

Carving Venmo into a standalone unit makes it easier to track its financial performance independently and, if necessary, to sell it to another company, the people said.

Analysts have described Venmo as arguably PayPal's most valuable discrete asset, citing its user growth and expansion prospects. The app has been identified as a primary target for potential acquirers who could attach a premium valuation to it.

PayPal's stock has declined roughly 80% from its pandemic-era peak, a slide that has drawn takeover interest. Stripe is among the companies that have examined acquiring parts or all of PayPal, according to a February report. The company has since retained investment bankers to prepare against unsolicited bids and potential activist investor campaigns, according to separate reporting.

PayPal declined to comment.

Shares of PayPal rose approximately 3% following news of the reorganization.

Two senior executives are departing as part of the restructuring. Diego Scotti, who ran the consumer group that encompassed Venmo, and Michelle Gill, who oversaw a small business division that is being dissolved, are both leaving the company, the people said. Neither Scotti nor Gill responded to requests for comment.

To lead the new Venmo segment, PayPal is seeking to recruit a digital banking executive, the people said.

The reorganization also creates two supporting functions. An artificial intelligence transformation group will be established under Anshu Bhardwaj, a former Walmart technology executive. A financial services unit supporting the main segments will be led by Scott Young, who previously managed consumer banking operations at Goldman Sachs.

The restructuring comes against a backdrop of unresolved cost-cutting deliberations. Earlier this year, managers under Lores's predecessor, Alex Chriss, were directed to develop plans for headcount reductions of 15%. Those plans were left unresolved when Chriss departed, according to one of the people familiar with the matter. The threat of broader layoffs remains, the people said, reflecting pressure similar to what payments rival Block has faced.

Chriss, a former Intuit executive, was unable to reverse the stock's prolonged decline and was replaced by Lores.

PayPal is scheduled to report first-quarter earnings next week, giving investors their first formal look at the company's financial performance under new leadership.

The degree to which Lores's reorganization restores confidence in PayPal's competitive position — against Apple, Google, and Stripe in the e-commerce payments market — will likely depend on how quickly the newly defined Venmo segment can demonstrate independent growth and attract the executive talent the company is now actively recruiting.

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