Wednesday, September 03, 2008

Will eBay Take Their Medicine in the 3rd Quarter?

There is an interesting buzz coming out of San Jose these days, as rumors begin to fly, about impending layoffs at eBay. My information is second hand at best, but there is certainly a concern among current employees, that a big layoff is in the works. eBay resumes seem to be making the rounds in larger numbers over the last several weeks.

I contacted eBay to get information regarding possible layoffs and as of this writing have not heard back. 

While this is a rumor, lets connect the dots and see if we can dial this in:
  • Though it hasn't been announced yet, Eric Shoup, Director and General Manager of eBay Stores and ProStores has left the company to take a new position as Vice President of Product at The Generations Network, a Provo, Utah based Genealogy web site. Eric worked at eBay for the past 5 years and was just recently put in charge of the eBay Stores business in addition to ProStores. There is no word yet on a replacement or what eBay's plans are for ProStores and eBay Stores.
  • Update: eBay CTO (Chief Technology Officer) Matt Carey has left the company to join Home Depot as their new [CIO (Chief Information Officer)].  Matt Carey had been at eBay for 3 plus years and prior to that with Wal-Mart Stores.
  • Several other employees have left already or are leaving this month, but wish to remain anonymous. They wouldn't tell me if it was their choice or part of a layoff.
  • The concern among current employees is growing, according to a source.
  • A check of their Job Openings showed 19 positions available for, over the last 30 days. There are 64 positions available, company wide (including PayPal, Skype, StubHub, etc.) during that same period.  
  • As a point of comparison, Amazon has 338 positions posted over the last 28 days.
None of this means there is a layoff in the wings, but as we approach the end of the 3rd Quarter, analysts I've spoken with, suggest now would be the time for eBay to take their medicine; the numbers may not be looking good for the 3rd Quarter. Remember a year ago, eBay took a write-down on the value of Skype and the 3rd quarter is traditionally their worst quarter. 

If there marketplace problems are continuing, they certainly would want to go into the 4th Quarter as lean as possible.

eBay currently has more than 15,000 employees worldwide, so your guess is as good as mine about how many job cuts would be sufficient to help them out.

Again, at this point these are just rumors, but as you start looking at the signs, it does seem a reasonable possibility. I will update this post as I get more information.

Just my 15%


Andy Geldman said...

Scary stuff...

The part that stuck out to me as being more than just rumour was "19 positions available" - that's nothing for a company the size of eBay, and could mean a hiring freeze.

19 positions open would barely satisfy normal staff turnover.

Anonymous said... mentioned the director of stores left and no one replaced him. Could this mean no stores? That all merchandise will be required to be listed in core? What a disaster that would be!

And how come I don't see stores listed at the bottom of the page anymore?

Randy Smythe said...


I don't believe their have been any changes regarding ProStore and eBay Stores, I just don't know who has replaced Eric. Don't read too much into that.

tula said...

I wouldn't be surprised to see an end to Stores. They've already done it in the UK. Maybe if that works out the way they like, then they'll push it here on .com, as well. It's their usual M.O. of trying things out on the smaller international sites before rolling it out to everyone.

ms.pat said...

Whatever the truth is, you can count on Ebay coloring it and trying to make it look like success. I wouldn't doubt a layoff and they'll try to do it quietly. Sellers are leaving so why the need for so many employees. If Ebay keeps on this path they will be a smaller company - not a larger one. I think the writing is on the wall. Jim Cramer again said "volume is down, the company is in trouble" I believe that was yesterday or the day before.

Henrietta said...

I started to comment and it turned into a blog post, oh well! Thanks Randy.

Anonymous said...

You know once they remove stores the will be able to control and manipulate the marketplace (via search).

Ebay will be able to play favorites by giving visibility to only certain sellrs. They could also manipulate price this way.

Ebay wants a sale, and doesn't care if the seller doesn't get the highest price. A sale through ebay at a loss to a seller is still better then a fair price for a seller- but lost to Amazon.

It will also be easy to get rid of small sellers when their listing don't show.

Randy Smythe said...

Hi all,

I don't see any evidence that Stores will be closed but there is a possibility that ProStores may be.

Remember these are just rumors and I posted about them because there seems to be a growing concern among eBay employees.

vzaar Jamie said...

There is no evidence of shops/stores closing in the UK at present. Just rumours.

As for Matt Carey departing, that is very sad news indeed. You would hope that the technology roadmap was challenging and exciting enough to keep him at the company - perhaps not, but then again people will often leave one company for another to seek new or alternative challenges. I think the biggest step eBay can make now is to bring in a new CTO that has an impressive background of delivering quality product and tech and delivering them quickly.

Mike said...

Matt Carey, eBay's former CTO hired from Wal-Mart is identified in a 2007 FastCompany artical as "Donahoe's key partner".

Did someone at eBay finally wake up, take a look around then flee?

EventHorizon1984 said...

A check of their Job Openings showed 19 positions available for, over the last 30 days.

Between the hiring freeze and eBay's hiring in house, that "19" is pure public relations. IT hides the turnover rate.

This does not.

Computer professionals want their future employer to have low turnover. Typically signifying career stability and job satisfaction.

eBay's recent turnover rate is high. Take a good look at 2007. Each one of those newly hired professionals is filling the position of someone who left. And we are not talking entry level positions.

When a company bleeds out "Senior", "Staff", "Manager", "Director", etal positions, it's IT has serious problems.

Incidentally look at the difference in pay between the code monkeys and the Quality Assurance (QA) positions. QA is meant to weed out glitches, while code monkeys put them in.

Guess who's paid more, and guess why there are so many "glitches"?

Anonymous said...

Randy and Vzaar,

Over here in the UK, Ebay Shops continue to be available to sellers but Shop Inventory Format will no longer be available as of 24th September.

Listings types will then be Auctions and BINs, with a radical change in fee structures.

Medium and small sellers, particularly of unique and low cost items that were ideal for a mix of auction and SIF formats are deciding whether it is financially viable to continue with eBay.

Some have already closed their shops, the rest of us are considering our options.


AuctionWally said...

I don't know if eBay will take their medicine or not, but it seems like the doctor is IN.

I hope some of you get a moment to listen to my interview with the CEO of Worthpoint about the new merger of GoAntiques and Worthpoint.
The interview is here,
Thanks for telling it like it is Scott. Again!

Rob said...

good post

Anonymous said...

Could this 21 day hold on Paypal money be because they are in trouble?

Here is one of many articles about ebay layoffs and the resent situation.

A few captions from that article in Barron’s.

"More trouble is brewing for eBay -- and its employees."
"company is readying layoffs that could affect 10% of the company's 15,000 employees.
"Seller discontent with eBay is on the rise due to higher fees and other changes"
"a decline in these key metrics presents continued risk for the company."
"EBay shares are down approximately 30% this year, trading near their lowest level in five years."

Another Note
Now that they are holding more and more money 21 days, would not their liability/exposure be greatly increased and wonder if states are aware of the extended liability.

Just a thought.

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