Staying Focused on Opportunities, Dealing with Challenges

John Donahoe

Today we reported double-digit revenue growth, solid earnings performance and strong cash flow for 2014, reflecting the fundamental strengths of our company in a year marked by unexpected events and distractions.

We have challenges, but, overall, our focus and operating discipline continue to generate solid company results. I want to thank all our employees for what they do every day, and for enabling $255 billion in commerce volume last year for merchants and customers globally.

I am also excited to welcome several new members to our board of directors – seasoned Wall Street executives Perry Traquina and Frank Yeary. NBCUniversal executive Bonnie Hammer also joined our board earlier this month.

We also announced an agreement with one of our largest shareholders Carl Icahn. As part of our agreement – which reflects our alignment on separation and continued stability for our business – I look forward to welcoming Jonathan Christodoro, managing director of Icahn Capital LP, to our board as our fourth new director.

Collectively our new board members will bring tremendous value and expertise to our current board. And they will help us take steps towards creating two strong boards for eBay and PayPal.

As we head into 2015, an important year of transition for our company, we are confident we have strong leadership in each business to drive us forward.

At PayPal, we’re excited to have Dan Schulman as President and CEO designee. Dan, who joined last quarter, is quickly immersing himself in all aspects of PayPal’s business, and positioning it for continued success.  PayPal had a strong year in 2014, driving engagement and delivering great product experiences.

At eBay Marketplaces, following the series of challenges experienced in 2014, Devin Wenig and team are moving aggressively, with clear priorities to improve traffic, deliver strong product experiences, and manage our cost structure.  They are implementing a more targeted strategy, redeploying resources to our top priorities, and scaling back or stopping other initiatives.  That said, 2015 will continue to be challenging, and we expect Marketplaces’ performance to soften further before we see stabilization and improvement.

As we look to 2015, we are taking decisive actions to address both the opportunities we see and the challenges we face. To that end, we’re streamlining our cost structure and portfolio as we set up eBay and PayPal to succeed as independent, public companies. 

We plan to reduce our workforce globally by approximately 2,400 positions, which represents about seven percent of our global workforce, across eBay Marketplaces, PayPal, and eBay Enterprise. This was a difficult decision. Eliminating jobs is never easy. But it is necessary to reduce complexity and create more competitive cost structures.

Our employees who are affected will be treated fairly and with respect, and I want to thank them all for their contributions to our company.

We will also be exploring strategic options for eBay Enterprise including a sale or IPO. Enterprise is a good business but it has become clear that it has increasingly divergent opportunities and limited synergies with eBay. This move will help both businesses focus on their respective priorities moving forward.

Looking ahead, we are clear on what we need to do at eBay and PayPal to deliver on our 2015 plans.  I strongly believe that separation is the right path for our company, and we remain deeply committed to doing what’s best for our business, shareholders and customers.