10 per cent of jobs to go at eBay

Online auctioneer eBay is the latest tech firm to announce job cuts, saying today it would knock a tenth of its work force as its third quarter revenue was at the low end of forecasts.

The web firm also said it would spend more than $1.3 billion (£742 million) to buy companies that bolster its online payments and classifieds businesses as it seeks to improve its performance in a weak US economy.

Its shares fell 2.6 per cent in pre-market trading after rising as much as two per cent immediately after the announcement.

Despite facing slower growth in its core auction business over the last few years, eBay said it will buy the Bill Me Later payments service for about $820 million in cash and $125 million in options. The business offers consumers deferred payments and financing promotions.

It will be combined with eBay's PayPal unit and is expected to generate $150 million in revenue in 2009. EBay sees the deal closing in the fourth quarter and adding to earnings in 2011.

The company is also buying Danish online classifieds businesses Den Bla Avis and BilBasen for about $390 million.

The online firm said the job cuts would affect about 1,000 employees and several hundred temporary workers. The reduction is expected to incur restructuring charges of about $70 million to $80 million, mostly in the fourth quarter.

For the third quarter, eBay expects to hit the low end of its revenue forecast of $2.1 billion to $2.15 billion and exceed the high end of its earnings forecast range of 39 cents to 41 cents per share, before items. The San Jose, California-based company is scheduled to announce third-quarter results on October 15.

Email to a friend

Print this page

Social Bookmark this article: What is this?

Digg

Delicious

Reddit

StumbleUpon

Slashdot

Google

Facebook