eBay shares rise on 9% workforce reduction announcement

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eBay shares rise on 9% workforce reduction announcement
Credit: © Reuters.

Shares of eBay (NASDAQ: EBAY ) popped over 3.7% in premarket trading Wednesday after the e-commerce giant said it intends to reduce its workforce by 1,000 positions, constituting approximately 9% of its full-time employees

In an online announcement, eBay CEO Jamie Iannone said the move comes due to a “challenging macroeconomic environment,” adding that the company also plans to scale back its contracts with its "alternate workforce" in the coming months.

To facilitate these discussions, Iannone has requested US-based employees to work from home on January 24th, ensuring a private and conducive environment. Employees who face layoffs will be notified by their leaders via Zoom, Iannone said.

This move by eBay reflects the latest wave of job cuts in the tech industry during the initial month of 2024, following a challenging 2023 for the sector. Other notable companies, such as Google, Duolingo, and Amazon, have also implemented layoffs as they navigate shifts in their strategic focuses, particularly toward artificial intelligence and related areas.

eBay’s announcement has not provided details on anticipated savings, restructuring expenses, or the extent of roles and segments affected, including the mix of US and Rest of World (RoW) headcount impacted, analysts from Bernstein wrote in a Wednesday note.

“Given the language around efficiency, we suspect it involves cutting middle-management layers,” the analysts said.

“Not too surprising to see EBAY take action given the broader trend in cost rationalization still playing out across the industry, and the commitment to positive operating leverage in 2024.”

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