[HN Gopher] PayPal Announces Layoffs, Closes San Fransisco Office
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PayPal Announces Layoffs, Closes San Fransisco Office
Author : rbanffy
Score : 48 points
Date : 2022-05-27 16:31 UTC (6 hours ago)
(HTM) web link (gizmodo.com)
(TXT) w3m dump (gizmodo.com)
| greenyoda wrote:
| They're also laying off 300 employees in Ireland:
| https://www.irishtimes.com/business/technology/paypal-to-cut...
| codefreeordie wrote:
| This headline is combining two separate items with separate
| causes.
|
| PayPal is closing the SF office because the new tax regime makes
| their business model nonfunctional (as it does to all payments
| businesses). The tax would be effectively based on payment
| volume, rather than profit, and so more than their entire margin
| would burn up in taxes.
|
| Separately, PayPal is laying off staff across their other offices
| to cut expenses and transition further from a growth-of-revenues
| model to a model of stable revenue at lower cost. Now being not
| the time to try to have rapid growth in the space if you're
| already the entrenched player, at least according to them.
| [deleted]
| gamblor956 wrote:
| _PayPal is closing the SF office because the new tax regime
| makes their business model nonfunctional (as it does to all
| payments businesses). The tax would be effectively based on
| payment volume, rather than profit, and so more than their
| entire margin would burn up in taxes_
|
| That is not how the tax works. It taxes _gross receipts,_ in
| this case meaning Paypal 's fees, not its total payment volume
| processed, because it only applies to amounts that would be
| considered income to Paypal for federal income tax purposes.
| Furthermore, the tax is allocated based on payroll, meaning
| that the tax is prorated based on the % of employees based in
| the city of SF vs elsewhere.
|
| Paypal reported net income (i.e., profits) of almost $4 billion
| last year on roughly $25 billion of revenue on roughly $1.250
| _trillion_ of payment volume. Only approximately 550 of their
| 26,500 employees were located in the SF office, meaning that
| their effective GRT rate would have been .016%, for a tax of
| roughly $4m, or approximately their costs for 10 employees.
| They can afford the gross receipts tax.
| TedDoesntTalk wrote:
| I'm not sure I agree with your numbers, but even if they are
| correct, the tax punishes them for growth: growing their
| workforce or growing revenues.
| danamit wrote:
| Well, looking at the numbers it does not seem to be that
| big of a punishment.
|
| By anyway, punishing growth should be valid, IT workers are
| doing well, the homeless that are to be helped is not like
| they gonna be hired as software devs at PayPal.
|
| Taxes are nothing but a reallocation of resources and it
| always has been, and it is the price you pay for living in
| a society, and it is worth it, you'd rather have the
| addicted and mentally ill outside of streets one day you
| might get stabbed by one of them.
|
| Also it is not just about taxes, the gov need to take some
| drastic measures too.
| TedDoesntTalk wrote:
| > Taxes are nothing but a reallocation of resources
|
| Only when they are used to pay for social programs. Not
| when they are used to pay things like infrastructure,
| defense, etc.
| danamit wrote:
| Infrastructure and defense are resources, it is something
| everyone benefits from.
| dnissley wrote:
| According to the webpage for the gross receipts tax [1],
| "Gross receipts include but is not limited to all amounts
| that constitute gross income for federal income tax
| purposes."
|
| Looks like PayPal's gross income was around 3x their net
| income for 2021: 12.1 billion [2]
|
| 1: https://sftreasurer.org/business/taxes-fees/gross-
| receipts-t...
|
| 2: https://www.wsj.com/market-
| data/quotes/PYPL/financials/annua...
| gamblor956 wrote:
| PayPals taxable income was $25 billion, so I went with the
| higher number (25 billion vs 12 billion) to establish an
| upper bound.
|
| For a more salient point of comparison, PayPal is
| complaining about paying $0.01 for every $100 of revenue.
| onetokeoverthe wrote:
| TedDoesntTalk wrote:
| > tax would be effectively based on payment volume, rather than
| profit
|
| Playing SimCity as a young kid taught me that raising taxes too
| much means people and businesses leave. Maybe the SF lawmakers
| did not play SimCity growing up.
| turadg wrote:
| The gross receipts tax policy is from Proposition C. So
| decided by SF residents, not legislators.
|
| https://www.vox.com/2018/11/7/18065086/san-francisco-
| prop-c-...
| 1-6 wrote:
| If you say to residents, 'tax the rich' without providing
| much background, of course you'll get their vote.
| Legislators are responsible for making the messaging clear
| and fair.
| codefreeordie wrote:
| At the same time, the voting public should also be
| smarter than this
| yucky wrote:
| That would be nice but it never works out that way.
| JumpCrisscross wrote:
| > _you say to residents, 'tax the rich' without providing
| much background, of course you'll get their vote_
|
| This shifts too much responsibility off voters. Not every
| voting population is so predictably simple.
| fzzzy wrote:
| Maybe they want people to leave?
| node-bayarea wrote:
| Maybe it's Maybelline :)
| rbanffy wrote:
| Reverting gentrification is a valid goal.
| tablespoon wrote:
| > Playing SimCity as a young kid taught me that raising taxes
| too much means people and businesses leave. Maybe the SF
| lawmakers did not play SimCity growing up.
|
| That may be so, but SimCity didn't teach you about the real
| world, it taught you about SimCity. The simplified worlds of
| simulations often have ideological assumptions baked in,
| either deliberately or inadvertently.
| lovecg wrote:
| SimCity definitely reflects the values of its creators.
| After being brainwashed by SimCity as a kid it took me a
| while to realize that things like for example zoning are
| not some law of nature governing how cities are organized
| and the real world is infinitely more varied.
| TedDoesntTalk wrote:
| Are you suggesting that no part of SimCity is based on "the
| real world"?
|
| See also https://news.ycombinator.com/item?id=31531997
| currently front page on HN
| tablespoon wrote:
| I'm saying SimCity isn't the real world, it's DOS-based
| entertainment. So you can't jump from "SimCity behaves
| thusly" to "the world behaves thusly."
| TedDoesntTalk wrote:
| How do you explain the influx of businesses to places
| like Austin? It has nothing to do with taxes?
| rbanffy wrote:
| The models in games are usually optimised for
| entertainment rather than predictive accuracy.
| nso95 wrote:
| Except it got this part right..
| joemazerino wrote:
| SF Lawmakers were too busy playing AI vs AI and then
| complaining about the results.
| Datenstrom wrote:
| Maybe governance simulation can be worked into some
| standardized test for basic competence for lawmakers. Or is
| that not democratic?
| tablespoon wrote:
| > Maybe governance simulation can be worked into some
| standardized test for basic competence for lawmakers. Or is
| that not democratic?
|
| It would be profoundly anti-democratic. Just, as a thought
| experiment, imagine if the game was "Socialist Utopia:
| Central Planning _Works_. " A requirement like you propose
| would amount to a program of ideological indoctrination,
| either deliberate or inadvertent.
| iostream25 wrote:
| San FranCisco, not Fransisco
| kurthr wrote:
| You say Cisco, I say Frisco.
| jweir wrote:
| The original headline is wrong - garbage in - garbage out!
| pcurve wrote:
| I guess we'll see more announcements like this in coming months.
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