Visa NYSE:V, a global payments-processing company, rose approximately 2.2% in premarket trading following a report that it planned to eliminate about 7% of its workforce. The reduction would affect approximately 2,600 positions, according to a staff memorandum reported by Bloomberg News. Visa did not immediately respond to Reuters' request for comment.
The proposed reductions will primarily affect Visa's technology and product teams. Artificial intelligence has reportedly helped the company reduce repetitive work and accelerate product development, although a person familiar with Visa's reasoning said AI was not the only factor behind the decision. The company is scheduled to report its quarterly results after Tuesday's market close.
Other payments and financial-technology companies have also announced substantial workforce reductions. Mastercard NYSE:MA, a global card and payments network, previously said it would eliminate 4% of its worldwide workforce, while Block, a financial-technology company operating payment services, announced approximately 4,000 reductions in February. Financially, eliminating 7% of Visa's workforce represents a material organizational change, but the absence of a disclosed savings target prevents investors from calculating the expected effect on operating profit. Visa's forthcoming results may provide additional information about expenses, growth and how management intends to redirect resources.