As anticipated, eBay has announced intentions to reduce its global workforce by about seven percent this quarter ahead of its planned split with PayPal. That translates to the loss of around 2,400 jobs spanning the company’s e-commerce, enterprise and PayPal business units.
eBay CEO John Donahoe said during a conference call that eliminating jobs is never easy but the decision was necessary.
Last September, it was revealed that eBay would spin PayPal off into its own independent company to focus on their respective strengths. The commerce and payment markets are rapidly changing which led the board to determine that the two entities could operate more efficiently on their own.
eBay’s core business has had a tough time recovering from a security breach that took place in late February and early March of 2014. Although there was no evidence that financial information was compromised, the site advised all of its members to change their passwords.
Donahoe admitted on Wednesday that his company’s loyal customers returned but their more casual customers haven’t. What’s more, changes in search algorithms have resulted in fewer shoppers finding their way to the site.
As if the split with PayPal wasn’t enough, eBay is also considering spinning off or selling its enterprise unit.
News of the layoffs and another potential spinoff came alongside eBay’s fourth quarter results. During the three-month holiday period, eBay reported revenues of $4.92 billion and profits of $936 million, or $0.75 per share, which more or less met analysts’ expectations.