Mass Layoffs Expected at "Deteriorating" Ebay

Submitted by SadInAmerica on Tue, 09/16/2008 - 11:26pm.

Ebay workers may be in for a shock they didn't bargain for, with a report claiming the firm is floundering and preparing to lay off about 10 per cent of the company's 15,000 employees. According to an article in Barron's Weekly which cited a recent report by investment-boffins at Wedge Partners, the online auction giant's business is " deteriorating".

Current economic hardships - especially weakness in the consumer economy- added to the fact that quite a few Ebay sellers have been severely hacked off by recent changes in fee structures has put Ebay in a tight spot.

"Seller discontent with eEbay is on the rise due to higher fees and other changes, and we believe Ebay has seen numerous sellers migrating away from the Ebay platform and creating their own selling sites," wrote Brian Blair and Ryan Hunter, two Wedge analysts.

To add salt to Ebay's wounds, because about 50 per cent of the firm's revenues come from outside the U.S., the auction giant's finances are set for another beating as the dollar continues to strengthen.

"We don't have a handle on how much of the slowdown is due to economic conditions and how much is due to competition and execution, but we do believe a decline in these key metrics presents continued risk for the company" wrote Blair and Hunter, adding that gross merchandise volume for the third quarter could be well down from the $15.7 billion level reported in the second quarter.

"EBay shares are down approximately 30 per cent this year, trading near their lowest level in five years" the report continues, noting that 1500 jobs in the company are at immediate risk.
The company is apparently also taking a huge risk with a soon-to-be-released search platform currently being tested.

At the end of the day, however, no matter how much Ebay suffers in the short term, it's really the employees who may be sold short.

Sylvie Barak - September 15, 2008 - source TheInquirer

Tag this page!
Submitted by SadInAmerica on Tue, 09/16/2008 - 11:26pm.