Ebay to slash 10% of workforce

 

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By Reuters

Posted on 6 Oct 2008 at 15:19

EBay plans to cut its work force by 10%, amid warnings that Q3 revenue is likely to hit the low end of its forecast.

EBay says the job cuts will 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.

EBay is also preparing to spend more than $1.3 billion on companies that bolster its online payments and classifieds businesses, as it seeks to improve its performance in a weak US economy.

The company, which has faced slower growth in its core auction business over the last few years 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.

The new acquisition 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.

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