PayPal says it will “be a technology company again.” This means artificial intelligence.

PayPal is looking toward the future, despite its declining inventory and looming layoffs. On its first-quarter earnings call, CEO Enrique Llores told investors that PayPal needs to “recommit to fundamentals,” which includes “becoming a technology company again.”

There was no need to read between the lines, PayPal was promoting an AI-powered transformation.

Loris has said so explicitly, telling analysts on a call this week that leading companies are finding ways to differentiate themselves through innovation, and that this is the time for PayPal to take action. This includes modernizing its technology platform, moving faster to become “cloud-native,” and “aggressively embracing AI into our development processes,” Loris said. He added that the latter will increase the productivity of developers and shorten the time needed to reach the market.

It’s a startling admission by PayPal that it has yet to fully embrace AI within the company, while AI-assisted programming is one of the emerging areas where the technology has truly excelled.

Other consumer tech companies have rapidly embraced AI in recent months to aid programming, with Spotify even announcing in February that its senior developers haven’t written a line of code since December. Meanwhile, senior development teams are trying to outdo each other by using tokenmaxxing, a proxy for understanding which people in a company are experimenting with AI most often, based on the number of AI tokens they use.

It seems that PayPal is only now starting to catch up.

Loris said the company has formed a new team to “transform and simplify AI” to help with the enterprise AI agenda. Besides the planned layoffs, which Loris described as removing layers from its organizational structure, the addition of AI-powered operations is expected to bring the company at least $1.5 billion in cost savings over the next two to three years, he said.

The company announced last week that it is reorganizing its business, simplifying the process into three segments: payment solutions, PayPal, consumer financial services (and Venmo), as well as payment services and cryptocurrencies. Additionally, Bloomberg reported on Tuesday that PayPal plans to cut about 20% of its workforce over the next two to three years as part of its cost-savings plan, equivalent to north of 4,500 jobs.

Company executives said during the call that further cost savings will come from PayPal’s plans to adopt artificial intelligence. This includes bringing AI into areas beyond programming, such as customer service, support operations, and risk management, to name a few.

“I think the changes that artificial intelligence will enable us to make will be of great importance,” Lloris said. “That’s why we created a group last week, which, I was told, will be responsible for driving — function by function, process by process — this AI transformation. And this isn’t about adopting AI as a technology, as we’ve done a lot of experiments in the company, and we’ve seen what’s possible. It’s really about understanding how we can redesign key processes…and that’s what we’ve seen will deliver really significant savings.”

The announcement of an AI-driven campaign to cut costs while eliminating thousands of jobs highlights a fundamental criticism of the technology – it comes with a human cost.

It should be noted that in this case, PayPal actually needed to restructure. The company may have beat first-quarter earnings with revenue of $8.4 billion, up 7% year-over-year, but it expects weak guidance for the second quarter, sending the stock tumbling after earnings. This comes after a long post-pandemic decline that sent the stock down more than 80% from its 2021 high and crippled PayPal’s growth.

Asked if spinning off Venmo into its own business meant the company would be open to being sold, Loris said that, for now, is what makes the most sense in terms of a turnaround plan. However, he indicated his openness to future deals by saying: “My first priority is to maximize shareholder value,” in response to an analyst’s question about the sale.