By Greg Bensinger
EBay Inc. is considering a plan to eliminate thousands of jobs
early next year as it prepares to separate its PayPal payments
unit, according to people familiar with the company's thinking.
The cuts are expected to primarily affect workers in eBay's core
marketplace division, these people said. One said eBay has
discussed trimming at least 3,000 jobs, or 10% of its total
workforce.
The planned layoffs appear to be part of eBay's preparations to
be a stand-alone company, and a potentially attractive takeover
target. The marketplace division, which includes eBay.com and
StubHub, is more profitable than PayPal but is growing more slowly
and faces rising threats from Amazon.com Inc. and Alibaba Group
Holding Ltd., among others.
Analysts have said an independent eBay would be a candidate for
a buyout, and job cuts would help lower operating costs, a key
metric for buyout firms. Operating costs companywide jumped 14% in
this year's first nine months to $6.4 billion, which is roughly
half of total revenue.
A spokesman declined to comment on the company's plans for job
cuts. EBay has said it intends to be an independent company.
The spinoff plan stands in contrast to rivals Amazon and Apple
Inc., which are integrating payment services into their operations.
Apple in October began its Apple Pay service, allowing iPhone users
to tap their handset at registers to buy merchandise. Amazon is
rolling out a mobile wallet and credit-card-swiping devices for
brick-and-mortar merchants.
EBay said in September that it would spin off its PayPal unit by
the end of next year, creating two publicly traded companies. EBay
had 33,500 employees at the end of 2013, split about evenly between
PayPal and the marketplace unit, which includes eBay's smaller
enterprise unit. The company is still evaluating its options and
could alter the job-cut plan, the people familiar with eBay's
thinking cautioned.
The marketplace division posted a 6% rise in revenue to $2.16
billion in this year's third quarter, while revenue at PayPal
jumped 20%, to $1.95 billion.
In an interview with The Wall Street Journal last month,
marketplace division President Devin Wenig, who will become chief
executive of eBay following the split, said, "There will be
changes; there will be significant changes." He declined to
elaborate.
The potential job cuts would be the largest at eBay in many
years. Earlier this year, eBay trimmed a few dozen employees in its
Magento software unit and about 100 workers at ticket-seller
StubHub, according to reports. The last major job cuts were in 2012
when PayPal pared 2.5% of its staff, or about 325 full-time
positions.
EBay is controlling costs in other ways. It once planned to
expand its eBay Now one-hour delivery service to 25 markets by the
end of this year. But it has been held at five markets as eBay
works on its economics.
Without the faster-growing PayPal unit, the independent eBay
also will need new ways to boost revenue. Industry analysts expect
eBay to introduce more customer personalization options on its
site. The company also has been working with brick-and-mortar
retailers to help them sell merchandise in new ways, such as
installing interactive screens in changing rooms.
Write to Greg Bensinger at greg.bensinger@wsj.com
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