EBay to lay off 1,600 employees, cites economy

EBay, ebay whose online auctions business has slowed, on Monday said it will lay off 10% of its employees — about 1,600 — in a bid to streamline operations.

About 1,000 full-time employees will be let go in eBay's largest staff reduction. The rest will come from temporary and part-time workers.

EBay CEO John Donahoe said the company is "creating efficiency" in areas that require it, but he did not elaborate on which jobs would be cut.

A weak economy and the effects of the strengthening dollar are "affecting our businesses," Donahoe said. Still, eBay expects its third-quarter results will be higher than it predicted in July — though revenue will be at the low end of its projected range of $2.1 billion to $2.15 billion.

The company is scheduled to announce its third-quarter results next week.

EBay says it expects restructuring charges of $70 million to $80 million, mostly in the fourth quarter. It expects to save $150 million annually thereafter.

The cuts follow eBay's announcement earlier this year that it was trimming 125 jobs in Europe and North America, including 70 at its headquarters in San Jose, Calif.

Shares of eBay stumbled 6% to $17.89.

The latest layoffs come against a backdrop of $1.34 billion in acquisitions. EBay said it will buy an online-payments business, Bill Me Later, for $945 million in cash and outstanding options. It also announced plans to purchase Danish classifieds website dba.dk and vehicles website bilbasen.dk for $390 million in cash.

EBay already owns online-payment firm PayPal, but said Bill Me Later would add deferred payments and promotional financing services. Bill Me Later will become part of PayPal.