EBay silent on possible job cuts in Ireland

Online trading platform announces plans to reduce workforce by 7%

EBay has declined to say whether Irish workers will be affected by its decision to cut 2,400 jobs.

The company overnight announced plans to reduce its workforce by about 7 per cent with job losses across eBay Marketplaces, PayPal and eBay Enterprise.

However, a spokesman for the online trading platform said it was unable to comment further on the proposed cuts at this stage.

Ebay employs about 600 people in Ireland. Online payments firm PayPal, which is to become a separate business shortly, employs more than 2,000 people and last year announced plans to hire an additional 400 staff.

In addition, to reducing its headcount, Ebay announced plans to buy back shares and entering into a standstill agreement with activist investor Carl Icahn as the company prepares to split its marketplace and payments businesses.

EBay also said it’s exploring options for its enterprise unit, including a sale or initial public offering, and is adding three new board members, including a representative for Icahn, who had pushed the company to split up.

Progress on chief executive officer John Donahoe’s plan to divide the company made up for weak holiday-quarter sales and a revenue outlook that fell short of estimates, with the Californian company’s shares climbing in extended trading.

EBay’s PayPal will become a separate business, freeing up the unit to seek alliances and compete against other online-payment providers.

Meanwhile, EBay's main marketplace is facing intense competition from Amazon. com.

“They bought back a lot of shares, they added one of Mr Icahn’s employees to the board, they are cutting costs -- those are the things investors care about more than the actual performance of the company,” said Gil Luria, an analyst at Wedbush Securities, who has the equivalent of a hold rating on the stock. The shares of EBay rose 3.5 per cent after the announcements.

The stock declined less than 1 per cent to $53.37 at the close in New York, leaving it down 4.9 per cent this year after climbing 2.3 per cent in 2014.

First-quarter revenue will be $4.35 billion to $4.45 billion, EBay said in a statement on Wednesday.

Sales in the fourth quarter rose 9 per cent to $4.92 billion, the slowest holiday- quarter gain since 2010.

EBay’s sales growth lagged behind Amazon’s, however, with same-store sales climbing 5.8 per cent in December, compared with Amazon’s 22 per cent, according to ChannelAdvisor, company that helps other retailers sell online.

“EBay growing at half the rate of e-commerce isn’t good,” said Scot Wingo, ChannelAdvisor’s chief executive. “We all want to see EBay figure this out and get through this rough spot.”

EBay’s marketplace is still struggling from poor search- engine results following a change to Google’s search algorithms last year, Mr Donahoe said.

Excluding certain costs, profit was 90 cents a share, compared with analysts’ average estimate of 89 cents.

Restructuring charges related to the job cuts, which will affect 7 per cent of EBay’s workforce, will be $350 million to $400 million in 2015, the company said.

Additional reporting: Bloomberg

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