Wednesday, October 22, 2008

More Color on the eBay Layoffs!

Just an update on the eBay layoffs and I apologize upfront for the lack of confirmed details. eBay, still has not replied to my request.

There have been numerous reports on where the layoffs were coming from, so I will try and piece them together here:
  • I just found this blog post from a former eBay employee in Germany, where he laments the layoffs in Europe. He confirms what Henrietta over at The Red Ink Diary wrote shortly after the layoffs were announced:
    "It looks like the cuts in Europe basically meant that eBay slashed the local teams in each and every European country to a very bare minimum (often literally only a handful of employees) - and combining marketing and marketplace functions on a pan-European level in Switzerland and the UK respectively
    If you ask me that’s a rather bold move - and one which might backfire heavily: If there is one thing eBay should have learned with all their failed expansion plans (Japan or China anyone?), it’s the simple fact that eBay’s business is a rather local one and that you need the local face towards the seller and buyer community. With these layoffs eBay basically gives up on this idea and acts like you can run eBay like a machine - no interaction needed. I heavily doubt that this will work even in the short run - and that most larger Powersellers (who contribute a significant part of eBay’s revenue) will now finally throw the towel; looking for better managed outlets like Amazon Marketplace or their own webshops in conjunction with search & price comparison engine marketing."
  • We heard of layoffs in the Corporate Communications department with a boring memo from Alan Marks to his troops. 14% of the Corporate Communications team was simplified (a term Marks used).
  • Marketing functions were rolled into the Buyer Experience team and I have confirmed that Mike Linton, eBay's CMO will be leaving early in 2009. His team, what is left of them, will report to Greg Fant.
As I get more information I will update this post. It is clear that the majority of cuts came from the marketing side of the business, both here in the US and especially in the International markets. 

These specific moves are curious to me, as eBay seems to believe that they have a supply problem not a demand problem, while sellers believe just the opposite. If eBay believed they had a demand problem then they would not be cutting the one department tasked with increasing demand -- marketing.

Just my 15%


Anonymous said...

Randy: Amazon just posted horrible numbers. They lowered q4 down by 500 million. What do you think?

paul said...

I guess Ebay numbers where really not that bad. It looks like there will be no Christmas at Amazon as well.

Randy Smythe said...

Anonymous and Paul

I'm just going through the numbers right now. It is certainly light on the revenue guidance at $500 billion which is huge, but look at the range. They have a range of $1 billion which just shows me they just don't know where they will be yet. If the recession takes hold then they will be at the low end. If customers come to buy they will be at the high end.

Amazon will still see growth Q/Q so yest Paul, they will still have a Christmas. eBay is expecting less revenue in the 4th quarter then they had in the 3rd quarter.

I'm working on a post now and will have it up after the conference call.

Anonymous said...

I just went over the Amazon numbers. It looks like they are having the same problems that Ebay had.Ebay beat on q3 profits as did Amazon. Ebay lowered q4 numbers just as Amazon lowered there numbers by as much as 1 Billion $.

Randy Smythe said...

Anonymous, it certainly is not good news that Amazon revised their numbers down. I will go on the record saying I was wrong. I felt they had a good shot at maintaining their guidance.

The are still going to see a substantial growth Q/Q unlike eBay so I would still say that 3P sellers have a better shot of a sale at Amazon.

Anonymous said...

"run eBay like a machine - no interaction needed"

THat's pretty much the recipe. Shes got that right!

X-ebayer said...

One group of layoffs that I haven't heard about was the staff in SLC. Several members were laid off as part of the bigger vision to incorporate half into the core site. The new catalog type pages are the first wave of that move.