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eBay to slash global workforce by 1,000

October 07, 2008 15:04 IST

The world's largest online marketplace, eBay, will be slashing its global workforce to improve the cost structure of the company. This will include jobs in India.

eBay plans to reduce its global workforce by nearly 10 per cent, affecting about 1,000 permanent employees, in addition to several hundred temporary workers and the reduction of open positions, the company said in a statement. The online marketplace has about 16,000 permanent staff worldwide.

"The global reduction is intended to simplify and streamline eBay's organisation, improve the company's cost structure and strengthen the overall competitiveness of the company's existing businesses," eBay said in a statement on October 6.

According to an official of eBay India, the Indian arm of the American company, the firm would be bringing down its employee strength to 80 as part of its organisational plans toward improving its "long term financial architecture." At present, eBay India has 110 employees.

"We have taken the decision to outsource our customer service and payment operations to another BPO firm VCustomer. As part of the process, 30 employees of eBay India will be transitioning to VCustomer," eBay India's Senior Manager (Corporate Communications) Deepa Thomas told PTI. The transition of 30 employees to VCustomer is expected to be completed in three months, Thomas added.

According to the statement, the workforce reduction is expected to result in pretax restructuring charges of about 70 million dollars to 80 million dollars, with the charges predominantly recorded in the fourth quarter of 2008.

Commenting on the move to cut down its workforce, eBay's President and Chief Executive John Donahoe said, "While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth."

Meanwhile, eBay has also announced the acquisition of three firms. This includes the US-based online payments business Bill Me Later and two Danish sites – the online classifieds site and vehicles site The buyouts would help in strengthening eBay's position in online payments and classifieds.

Bill Me Later would be acquired for about $ 820 million in cash and another $ 125 million in outstanding options. eBay would buyout and for nearly $ 390 million cash.

"We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth... The acquisition of and gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences," Donahoe said.
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