By Tess Stynes
EBay Inc. announced plans to cut about 2,400 jobs, or about 7%
of its workforce, as the e-commerce giant prepares to spin off its
PayPal electronic-payments business later this year from
marketplace.
The San Jose, Calif., company said the cuts will occur across
eBay Marketplaces, PayPal and eBay Enterprise businesses. In
December, The Wall Street Journal reported that the company was
considering a plan.
The company announced the cuts with its fourth-quarter report,
in which earnings rose 10% on continuing growth at its PayPal
business.
EBay also said it would be exploring strategic options for eBay
Enterprise, including a sale or initial public offering.
"Enterprise is a strong business," the company said, but "it has
become clear that it has limited synergies with either business and
a separation will allow both to focus exclusively on their core
markets."
The company also announced today that it has entered into a
standstill agreement with investor Carl Icahn, the company's
largest active shareholder. In addition to certain corporate
governance provisions to be adopted by PayPal as an independent
company at the time of its spin-off from eBay, the agreement also
appointed Icahn Capital executive Jonathan Christodoro to eBay's
current board.
Mr. Icahn, in a statement on its website, said the corporate
governance provisions includes limits on any so-called poison pills
and prevents a staggered board at PayPal. The provisions were aimed
at giving shareholders a greater ability to weigh in on any offers
made for the company.
"In the end, it should be the shareholders' decision. This
fundamental belief was the underlying philosophy of many of the
corporate governance principles for which we advocated at PayPal,"
Mr. Icahn said. "We applaud eBay's board for making this agreement
possible."
Separately, eBay also announced the appointment of Wall Street
executives Frank Yeary and Perry Traquina to its board. These
appointments bring the total number of directors to 15, 13 of whom
are independent.
Shares of eBay rose 2.7% in recent after-hours trading. Through
Wednesday's close, the stock has risen nearly 16% from a two-year
low in October.
With the breakup, eBay's traditional marketplace division will
lose its fastest-growing division, one that was on pace to become
the company's largest.
Write to Tess Stynes at tess.stynes@wsj.com
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