Monday, October 06, 2008
eBay Lays Off 10 Percent of its Workforce
This is one of those cases where I wish I wasn't saying, "I told you so." Evidently, my hunch that eBay could was facing financial struggles was an accurate assessment. According to Bloomberg, the online auction site will lay off approximately 10 percent of its staff .
The job cuts will cost EBay $70 million to $80 million pretax, most of which will be recorded in the fourth quarter.EBay was unchanged at $18.94 at 8:20 a.m. before the Nasdaq Stock Market opened. The shares dropped 43 percent this year before today. EBay has lowered or removed most upfront fees for listings on its namesake auction site to boost the number of items being sold and defend market share from Amazon.com Inc., the world's largest online retailer.
I also noticed that eBay is putting a cap on sellers' shipping fees. I assume this move was in response to the growing complaints that many items couldn't be considered "deals" after high shipping costs were factored in.
There may be a glimpse of hope for eBay's future: as Americans become more desperate for quick cash, many may consider eBay their best option to generate extra cash for bills and monthly expenses.
By Matt O'Hern at 11:00 AM | Comments (0)