eBay Inc. (NASDAQ:EBAY) is accelerating plans to split its payment unit PayPal according to people familiar with inside information. CNBC’s, Dominic Chu, reports that the giant online store is considering trimming its workforce in a process that could affect up to 3,000 personnel.
The layoffs are seen as part of eBay Inc. (NASDAQ:EBAY)’s preparations to be a standalone company after the divestiture of the payment unit. People familiar with the matter according to the Wall Street journal could still alter the job-cuts plan as the final decision has not been made.
“According to a Dow Jones report citing people familiar with eBay thinking. They say that eBay Inc. (NASDAQ:EBAY) is considering a plan to cut thousands of jobs early next year. […] These cuts are primarily expected to affect workers in eBay core marketplace division, and they say it could be at least 3,000 some jobs or 10% of its total workforce,” said Mr. Chu.
eBay’s Marketplace division where most of the cuts are to be carried out is made of eBay.com and StubHub. The two units have remained profitable over the years compared to PayPal but have in the recent past experienced slow growth attributed to competition from Amazon.com, Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA).
The job cuts are expected to result in cost saving synergies that should make the company profitable and a possible takeover target. The spinoff plans of PayPal comes as a surprise as the likes of Amazon, and Apple continue to integrate payment systems into their operations.
The proposed job cuts will be the biggest in eBay Inc. (NASDAQ:EBAY)’s many years having trimmed a dozen early in the year on its Magneto software unit. The only major cut that the company has undertaken to date is of about 325 positions initiated in 2012. The company is also planning to initiate cost cutting measures in other ways aimed at having an impact on profit margins.
With the proposed spinoff of PayPal, independent eBay Inc. (NASDAQ:EBAY) will have to devise other new ways of bolstering its revenue. More customer personalization for its online marketplace could be introduced as a measure of attracting more buyers and sellers.
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