The US online retailer Ebay is further cutting its workforce. The company points to excessive spending compared to rather weak growth. Added to this is the tough competition.
Ebay says it wants to cut around 1,000 jobs. The US company announced this yesterday. The planned number corresponds to around nine percent of the online retailer’s entire workforce.
Apparently the restructuring of the company, with which Ebay wants to achieve faster growth, is not making sufficient progress. Chief executive Jamie Iannone wrote in a letter to employees: “While we are making progress in executing our strategy, our headcount and expenses have outpaced the growth of our business.”
Teams will be merged
Now the company wants to merge and downsize certain teams in order to “better meet the needs of customers around the world, among other things.” According to Iannone, the job cuts will also be accompanied by a reduction in the number of contracts for temporary employees.
Ebay faces fierce global competition in online trading. Above all, US competitor Amazon, but also Chinese retailers such as Temu and Shein, are causing problems for the pioneer in the business.
Falling margins, less solvent ones Customers
The forecast for the important Christmas quarter was recently weaker than the market expected. Ebay reported slight sales growth in the third quarter of 2023, but profit margins had recently fallen.
The company said that inflation, which had risen significantly last year, had reduced customers’ purchasing power. Ebay currently has around 132 million users and almost two billion items for sale on its platform.
Things work better with Paypal
Last February, the online retailer announced that it would lay off 500 employees worldwide, which corresponded to four percent of the total workforce. The job cuts follow a wave of layoffs in the U.S. tech industry after it hired heavily during the pandemic.
The former payment subsidiary Paypal has recently been somewhat more successful than Ebay. The division was spun off in 2015 and then listed on the stock exchange. The company recently exceeded growth expectations. However, Paypal also significantly reduced its workforce last year. And PayPal’s shares lost even more value last year than Ebay’s.