Online auction giant eBay is planning to cut 7pc of its workforce – some 2,400 people – ahead of plans to spin out its payments division PayPal.
eBay is also planning to sell off or IPO its eBay Enterprise unit, which serves bricks-and-mortar businesses with software, warehousing and logistics services.
eBay revealed plans to spin out PayPal as a separate entity in September.
Last night, eBay Inc reported fourth-quarter revenues of US$4.9bn, up 9pc on last year. The company declared a US$936m profit, up 10pc.
“In a year of unexpected events and distractions, we ended 2014 with double-digit revenue growth, solid earnings growth and strong cash flow, reflecting the fundamental strengths of our company,” said John Donahoe, president and CEO of eBay.
The distractions that Donahoe was referring to most likely included the company’s ongoing battle with billionaire corporate raider Carl Icahn, who has been clamouring for the break-up of eBay and PayPal.
“PayPal had another strong quarter, finishing an excellent year. eBay, while facing challenges, continues to be a great business and is focused on stabilising performance and engaging its core customers. Looking ahead, our plans are on track to separate eBay and PayPal into independent companies in the second half of 2015, and we are confident this is the right strategic path for each business.”
PayPal’s total payment volume grew 24pc in the fourth quarter, yielding revenue of US$2.2bn.
eBay Marketplaces saw revenue grow to US$2.3bn, while eBay Enterprise grew revenue to US$443m.
Strategic options for eBay
“Looking forward to 2015, we will be simplifying organisational structures to focus the businesses and ensure that we are set up to compete and win,” eBay said.
“During the first quarter, we plan to reduce our workforce globally by approximately 2,400 positions, which a represents about 7pc of our total workforce across eBay Marketplaces, PayPal, and eBay Enterprise.
“We will also be exploring strategic options for eBay Enterprise, including a sale or IPO. Enterprise is a strong business and a leading partner for large retailers, managing mission-critical components of their e-commerce initiatives.
“However, 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, as we create two independent world-class companies,” eBay said.
In Ireland, eBay and PayPal collectively employ around 2,400 people in Dublin and Dundalk.
eBay sign image via Shutterstock