eBay announces major job cuts ahead of PayPal split

Online auction site eBay has announced that it will cut 2,400 jobs during the first quarter of the year.

The company confirmed yesterday that it would be reducing its workforce by seven per cent in the build up to spinning off its e-commerce partner PayPal.

Read more: PayPal and eBay to go their separate ways in 2015

The job cuts, which will take place across eBay Marketplaces, Enterprise and PayPal, were confirmed during eBay’s fourth quarter earnings report, which had otherwise exceeded investor expectations.

"In a year of unexpected events and distractions, we ended 2014 with double-digit revenue growth, solid earnings growth and strong cash flow, reflecting the fundamental strengths of our company," eBay CEO John Donahoe said in a statement. "eBay, while facing challenges, continues to be a great business and is focused on stabilizing performance and engaging its core customers. Looking ahead, our plans are on track to separate eBay and PayPal into independent companies in the second half of 2015, and we are confident this is the right strategic path for each business."

The web giant also confirmed that it had finally agreed with billionaire businessman Carl Icahn to grant investors greater influence over PayPal following its split from eBay. Icahn has been pushing for the separation of the two firms for some time now.

eBay also confirmed that it is exploring a potential sale of its enterprise unit as despite remaining profitable, the company says it has “limited synergies” with its core business or PayPal.

Alongside the job cuts, the firm did reveal that profit rose during Q4 to $936 million (£617 million), causing the firm’s New York listed shares to rise by 2.6 per cent.

Read more: eBay gets slammed for leaving user data exposed

The news of the job cuts means that eBay will likely begin 2015 in the same way that they spent most of last year - responding to criticism. In 2014, the e-commerce giant faced a number of technical issues, and was inaccessible more than 10 times throughout the year. It also suffered a high profile security breach which left users’ personal data at risk.