Dive Brief:
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EBay has begun laying off 102 employees at two San Jose, California campuses and one San Francisco office, including software engineers and members of its communications, billing and legal teams, among others, according to a WARN notice filed Jan. 15 with California's Employment Development Department.
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According to eBay's website, the company employs approximately 14,000 employees globally. None of the affected workers has "bumping rights," a term referring to the possibility of allowing more senior employees to take less senior jobs, according to the WARN letter, which was emailed to Retail Dive.
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"It is part of our normal course of business to regularly evaluate initiatives and investments for eBay's continued long-term success," the company said in a statement emailed to Retail Dive. "As a result, we are adding and removing positions as appropriate across the company."
Dive Insight:
It's been four months since eBay CEO and President Devin Wenig left after a four year stint, citing differences with the company's board. CFO Scott Schenkel at that time stepped into the role as the e-commerce giant began its search for Wenig's permanent replacement. Schenkel is taking steps to right the ship in the meantime.
In November, the company sold its StubHub ticketing business to one of its founders, now at Viagogo, for $4 billion. The company garnered the deal all in cash but closed that revenue spigot. Wenig had previously said the company was mulling the sale of its classifieds business, another revenue maker.
EBay's performance has remained sluggish for some time. Third quarter revenue was flat year over year at $2.6 billion, as gross merchandise volume (GMV) fell 4% to $21.7 billion. Marketplace revenue fell 1% to $2.1 billion and GMV fell 5%. StubHub revenue rose 5% to $306 million, and the classifieds business revenue rose 4% to $265 million. The company grew its global active buyers base by 4% across platforms in the quarter.
But profits and margins are taking hits: GAAP operating margin fell to 20.1% from 21% last year, and GAAP net income from continuing operations fell 57% to $310 million from $720 million in the year-ago quarter.
Things aren't likely to get easier. In a client note emailed to Retail Dive last week, Wells Fargo Senior Analyst Brian Fitzgerald cited fierce competition from Amazon and multichannel retailers, increasing competition from marketplaces like Etsy, The RealReal, Facebook, Poshmark and Mercari, and the rollout of e-commerce taxes in the U.S. as stiff headwinds.
Those retailers are "driving consumer experience innovations which we believe EBAY remains poorly positioned to match," Fitzgerald wrote.
The company's challenges last year may have been "unusual," Wells Fargo also said, but warned that the company "has materially underperformed e-commerce for a longer period of time — with U.S. market share diminishing from approximately 10% at the beginning of 2015 to 5% in 3Q19."
And while in the past the company has been able "to post respectable growth while losing share," with GMV rising in the high single digits as recently as the second quarter of 2018, Wells Fargo is less confident that can continue. "While e-commerce market growth has remained fairly robust (and even demonstrated acceleration in the U.S. in 3Q19, owing to strong performance from [Amazon] and [Walmart]), we believe that e-commerce growth opportunities will increasingly be centered on rapid fulfillment and local delivery/pick-up, areas of opportunity which are essentially unavailable to EBAY," Fitzgerald's team said.