How nice of Ebay. The company has announced it plans to lay off approximately 1000 employees, which equates to 10% of its workforce. Ebay will also remove hundreds of temp positions from the payroll as well.
This comes on the heel of announcing that they have acquired DBA and bilbasen out of Denmark for approximately $380 million and BillMeLater, an amazon funded company for $820 million. The deals were made in cash and over $100 million in outstanding options. The layoffs will give Ebay a restructuring charge of around $75 million dollars, so I can see why they felt the need to spend over a billion to buy these other two companies.
Ebay’s president and CEO John Donahoe, says the purchase of billmelater is complementary to PayPal, he states “Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.” The acquisition of DBA, Denmark’s leading online classifieds site is obviously to take over a regional big boy.
This year, Ebay’s stock is down almost 50 percent in value. Obviously the investors haven’t been too keen on previous acquisitions. Buying these new companies might give Ebay a quick lift in the short term, but with all the red tape they have, it will lead to trouble in the future. Good luck with these new purchases Ebay, you will need all the luck you can get.