By San Jose, California – eBay, the online marketplace giant, has recently made a significant announcement regarding its workforce. The company plans to cut around 1,000 jobs, which accounts for approximately 9% of its total employees. Alongside this, eBay has also revealed its intention to scale back its use of contractors.
eBay’s shares saw an increase of 1.6% in late trading, reaching $42.06 per share. This positive movement in the stock price coincided with a 0.4% rise in the S&P 500 index.
In a letter posted on eBay’s official website, CEO Jamie Iannone addressed the company’s staff, stating, “While we are making progress against our strategy, our overall headcount and expenses have outpaced the growth of our business.” Iannone explained that these personnel reductions are part of organizational changes aimed at improving the end-to-end experience for customers worldwide.
To facilitate this transition, eBay has informed its employees to work from home on Wednesday. This will enable the company to begin notifying those affected by the job cuts.
Iannone expressed his optimism about the future, emphasizing that these changes will result in a more focused and agile eBay, better positioned to fulfill their purpose of creating economic opportunity for all.
According to Wells Fargo analyst Ken Gawrelski, these job cuts are expected to save eBay approximately $200 million annually. Nonetheless, Gawrelski believes that they also indicate ongoing challenges for the company’s business. He now predicts that eBay’s fourth-quarter gross merchandise value (GMV) will likely only achieve modest growth within the previously provided guidance range of flat to 2% on a year-over-year basis. Additionally, the analyst forecasts a decline of 2.3% in GMV for this year, followed by another 1.5% drop in 2025. Previously, Gawrelski had anticipated stagnation for 2024, with 2% growth in 2025.
Gawrelski maintains an Equal Weight rating on eBay’s stock, with a target price of $45. He highlights the company’s “compelling valuation” but acknowledges that it is unlikely to outperform until GMV returns to a growth mode. Gawrelski concludes, “The investment case is challenging for Internet businesses that struggle to grow the top line.”
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