Dive Brief:
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EBay is reducing its workforce by about 9%, affecting about 1,000 full-time employees, according to an internal Jan. 23 memo from CEO Jamie Iannone that the company shared publicly on Wednesday. In coming months, the marketplace will also scale back its contract workforce, Iannone said.
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EBay is grappling with external pressure including a "challenging macroeconomic environment,” and its “headcount and expenses have outpaced the growth of our business,” Iannone said.
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The move will cost $90 million to $110 million, largely severance payments and post-employment benefits and most of it in Q4 2023, according to a filing with the Securities and Exchange Commission. The workforce restructuring will be nearly complete by the end of Q2 this year, per the filing.
Dive Insight:
EBay has been tightening its belt for months now. Nearly a year ago, the marketplace laid off about 500 employees. In November, Chief Financial Officer Steve Priest said the company was “looking at every area of our cost structure.”
“And we can control our cost structure,” he also said, per an earnings transcript. “I mean, we are operating in a rather dynamic macro environment and so we will lean in as we said, and make sure that our costs grow more slowly than revenue in 2024.”
The focus on cost containment is something of a departure, according to Wells Fargo analysts led by Ken Gawrelski.
“eBay is managing its cost base aggressively post a period of reinvestment in tech and product development,” Gawrelski said.
The company last year unveiled a ‘Certified by Brand’ luxury resale program, invested in sports trading card company COMC and introduced a trading card submission service. The previous year eBay acquired collectibles tech platform TCGplayer for $295 million.
Collectibles drove over $10 billion in gross merchandise volume in the preceding 12 months, and more than one in four eBay buyers purchased at least one collectible over the year, Iannone told analysts in November. Collectors provide the highest conversion, repurchase, and retention rates, and are among the heaviest cross-category shoppers on the platform, he also said.
“Our goal is to remain the world's most loved destination for passionate collectibles enthusiasts, providing access to the most compelling assortment of inventory across multiple categories in a high-trust environment,” he said.
In eBay’s most recent quarter, which executives said bested expectations, revenue rose 11% to $2.5 billion, as gross merchandise volume fell 10% to $19.5 billion. Its number of annual active buyers declined by 5% to 154 million globally, and the number of annual active sellers remained flat at 19 million.
