eBay is planning to cut 10 per cent of its core division, including staff working on eBay and StubHub (an online ticket marketplace) due to the companies split from payments platform PayPal.
eBay announced the two companies would separate to create two public traded companies, and eBay would continue to hold a major stake in the payments service. eBay has a total of 33,500 employees, split evenly between eBay and PayPal offices. The removal of 3,000 workers is the largest cutback eBay has had to date, far surpassing the 325 jobs lost as part of a restructuring effort in 2012 at PayPal.
It is unclear whether eBay is running at an operating loss, with PayPal reporting continually high profits. Once the two companies separate, investors will be able to get a better look at both companies—although it already seems like PayPal is soaring ahead of eBay in revenue.
eBay is still the largest online auction service, rivaled only by Alibaba’s Taobao in China. High selling fees have been an issue with retention on the site, especially with alternatives like Gumtree offering no charge for selling and Amazon offering more lucrative rewards for online stores.
President Devin Wenig said “There will be changes; there will be significant changes,” when asked about the split by The Wall Street Journal. Wenig is likely to become the acting CEO for eBay when the split occurs.
It appears eBay has started a trend of two large entities splitting from each other, Symantec recently announced it would be splitting its company in two with one company focused on cloud storage and the other on security. HP has also announced it would split into two companies, one focused on computers and the other on printers.