eBay Inc (NASDAQ:EBAY) will be reducing its global workforce by 7 percent, representing about 2,400 staff worldwide, as the e-commerce giant is reeling from the effects of a cyber-attack that forced it to ask customers to reset their passwords. “Eliminating jobs is never easy, but these decisions were necessary,” CEO John Donahoe said in a conference call on Wednesday, after discussing the future of the company without PayPal. Costs for restructuring and separation is pegged at $210 million to $240 million for the first quarter, and up to $350 million to $400 million for the whole year.
PayPal will become a separate business unit, a move highly applauded by activist investor Carl Icahn, who publicly demanded eBay Inc (NASDAQ:EBAY)’s board, as well as Donahoe, to free up PayPal. “I believe that, following the spinoff, eBay and PayPal will both be well-positioned to take advantage of multiple opportunities,” Icahn wrote in a statement. As two separate companies, both PayPal and eBay can aggressively seek for partnerships that will help in maintaining a foothold on online payments and e-commerce markets. Alibaba Group Holding Ltd (NYSE:BABA), Amazon.com, Inc.(NASDAQ:AMZN), and Google Inc (NASDAQ:GOOGL) are seen by Wall Street analysts as potential buyers.
eBay Inc (NASDAQ:EBAY) is also considering the sale of its options for its enterprise unit, and is working to initiate either an initial public offering or an outright sale. It will also add 3 new board members, 1 of which will represent Icahn, who worked for the company to split up. Shares surged in extended trading on progress of the company’s planned split up, making up for a weak holiday sales and forecast of revenue that is lower than expected.
eBay Inc (NASDAQ:EBAY) shares were up as much as 2.6 percent in after-hours trading. The company reported a fourth quarter profit of $936 million, and a revenue of $4.9 billion. For the first quarter, it expects an earnings of 68 cents to 71 cents per share, and a revenue of $4.35 billion to $4.45 billion.
This article has been written by Nonito Guntan.
eBay Inc (EBAY)’s Shares Skyrocket Post PayPal Spinoff Decision, Investors Applaud the Move
