EBay is laying off approximately 500 employees, or roughly 4 percent of its 10,800-strong staff, a filing with the Securities and Exchange Commission (SEC) shows.
In a message to employees earlier this week, Jamie Iannone, CEO of eBay Inc., attributed the layoffs to the current uncertain macroeconomic environment, which has been littered with high inflation and a market downturn throughout 2022—which both lingered enough to spark concerns of a potential recession.
“To create long-term, sustainable growth for eBay, we need to evolve our organization as we take the next step in our strategy—focused on driving growth, building a trusted marketplace, empowering enthusiasts and seeding new technologies for the future,” Iannone told employees.
Iannone said in his note that eBay would provide “comprehensive transition packages with severance and employee incentive payments” to help support the terminated employees.
In an official WARN notice to California’s Employment Development Department (EDD), eBay said it decided to eliminate the jobs of 185 workers at its headquarters in San Jose and an outpost site in San Francisco.
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“All affected employees will receive in excess of 60 days advance notice, or pay in lieu of notice, as required by law,” eBay stated in the WARN letter.
EBay has not indicated in which departments the layoffs are occurring.
Iannone said the staff trimming is designed to strengthen the online marketplace’s ability to “deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform,” and ensure the company is concentrating on more impactful initiatives.
One such offering eBay is prioritizing is the expansion of its “focus categories” which include auto parts and accessories, refurbished products, sneakers, jewelry and trading cards. In October, the company shelled out $295 million to beef up the focus categories with the acquisition of TCGplayer, a marketplace for collectible card game enthusiasts. Months prior, eBay also acquired an NFT marketplace KnownOrigin for an undisclosed sum.
“Importantly, this shift gives us additional space to invest and create new roles in high-potential areas—new technologies, customer innovations and key markets—and to continue to adapt and flex with the changing macro, e-commerce and technology landscape,” said Iannone. “We’re also simplifying our structure to make decisions more effectively and with more speed.”
EBay’s layoffs come as other significant job cuts have rocked major commerce-related companies in February, such as FedEx, which is cutting 10 percent of its officers and directors. Amazon-owned electric vehicle manufacturer Rivian also said it was laying off 840 of its 14,000 employees, while outdoor retailer REI is slashing 167 jobs from its headquarters.
Another e-commerce marketplace with an auction-like business model, StockX, was one of the earliest companies to make serious staff changes, laying off 8 percent of employees as early as last June. On top of the additional job cuts, the sneaker and streetwear resale company laid off another 80 corporate employees in November.
The layoffs have permeated throughout many industries, with retailers and supply chain businesses seeing their labor force dwindle in recent months. Amazon is beginning to lay off some 18,000 workers this year, and mass job cuts are occurring across a who’s who of retailers including H&M Group, Nordstrom, Gap Inc., Bed Bath & Beyond, Wayfair, Wolverine Worldwide, Shopify, VF Corp. and more. On the supply chain front, companies like C.H. Robinson, Flexport and GXO Logistics all made cuts.
Major tech firms have taken the biggest axe to their manpower, with companies like Salesforce, Google, Meta, Microsoft, Zoom, Dell, Twitter and Uber all showing thousands of employees their walking papers in recent months.
In the wake of the announcement, EBay now awaits to report its fourth-quarter and full-year earnings on Feb. 22. The company expects quarterly revenue to range between $2.42 billion to $2.5 billion, which would represent a currency-neutral decline of 1 percent to 4 percent from 2021 holiday sales numbers. Diluted earnings per share are projected to be between 76 cents and 82 cents.
Full-year forecasts illustrate the slow 2022 after e-commerce spending accelerated during the Covid-19 pandemic. EBay anticipates revenue for the full year to be between $9.71 billion and $9.79 billion, or a currency-neutral decline of 3 percent to 4 percent from 2021 totals. Diluted earnings per share is predicted to come at a loss in between $2.68 and $2.74.
For the company’s third quarter ended Sept. 30, revenue was $2.4 billion, down 5 percent on a reported basis and down 2 percent on a currency-neutral basis. Gross merchandise volume (GMV) sold across the marketplace was $17.7 billion, down 11 percent on a reported basis and down 5 percent on a currency-neutral basis. Net loss from continuing operations was $70 million.
Despite the cutting in headcount, eBay remains in an advantageous cash position. Cash and cash equivalents, as well as non-equity investments portfolio totaled $4.8 billion at the end of the quarter.