eBay Reduces Workforce by 10%
By: Richard Brewer-Hay
In addition to announcing the acquisition of U.S.-based online payments business Bill Me Later and of Denmark’s leading online classifieds site dba.dk and vehicles site bilbasen.dk, eBay today also announced plans to reduce its global workforce by approximately 10 percent, affecting about 1,000 employees in addition to several hundred temporary workers and the reduction of open positions.
The reduction is expected to result in pretax restructuring charges of approximately $70 million to $80 million, with the charges predominantly recorded in the fourth quarter of 2008. According to the press release, “the global reduction is intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses.”
“We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,” said John Donahoe, eBay Inc.’s president and chief executive officer. “Bill Me Later is a natural addition to our portfolio, a company that belongs with PayPal. Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.”
“Our classifieds acquisition gives us another market leadership position in Europe for this rapidly growing part of our portfolio,” Donahoe said. “We are the global leader in classifieds with top positions in Canada, Australia, Germany, Japan and the United Kingdom, and sites in more than 1,000 cities across 20 countries. The acquisition of dba.dk and bilbasen.dk gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences.”
Commenting on the company’s workforce reduction, Donahoe said: “While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth.”
The company also stated it expects to hit the low end of its Q3 2008 revenue guidance and exceed GAAP and non-GAAP earnings per share guidance as issued in conjunction with its second quarter earnings release on July 16. eBay is scheduled to announce third quarter results on October 15.
You can find out more when eBay hosts an investor conference call at 5:30am PT this morning at http://investor.ebay.com. The call will be archived at the same address.
For more information regarding this news and to access additional presentations and documents related to all of today’s announcements, please visit http://blog.ebay.com/news.