EBay Announces Change Of Structure

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January 21, 2015- Ebay made an announcement that it will lay off 7 percent of its work force. This is equivalent to at least 2000 of its current number of employees. The decision came after the result of the company’s performance in the last quarter of 2014. EBay only experienced an increase of 3 percent in its sales in the US market. This was far from their growth projection, which is usually in the double digits.

Factors contributing to eBay’s low sales:

• Recall that hackers attacked the company last May 2014. The hackers paralyzed most of eBay’s transactions. Profits dwindled. They stored an estimated 145 million encrypted data in the online retailer’s system and injected other non financial information.

• It was also during 2014 that the tension between Paypal with investor Carl Icahn escalated. The feud between the two parties ended with eBay spinning off Paypal. Five top executives of eBay exited the company.

For the year 2014, eBay reports that its net revenue is $17.902 billion. The figure grew by 11.6% from 2013. During the last quarter of 2014, eBay reports an increased 2.9 million buyers compared to the third quarter of the same year. For the whole year, it had 14.9 million new buyers.

Problem with workers being displaced

Why did eBay decide to lay off workers despite the increase in sales? EBay’s financial advisors saw that the cost of operation was way too high.

With this news, the ordinary citizens are the ones affected most. One cannot control the decisions made by those sitting in the board of directors meeting. You could only hope that the company does well so you can keep you day job.

According to a recent study, the number of unemployed in the US continues to increase. This will have tremendous impact on US economy.

Electronic Retailing Industry

With electronic retailing industry growing over the years, it is expected that lesser human interventions will be needed in the line of business. Papermart.com, a packaging company, employs only a few workers. Its products and services can be accessed online and orders and shipments are made online. This cuts cost for the business which is good for the thriving company. However this could also mean that there will be more people who will not have daytime jobs.

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