eBay Layoffs Again as Marketplace Bets on Luxury and Recommerce

eBay is cutting about 1,000 jobs, which is roughly 9% of its workforce, in a second round of eBay layoffs this year as the online marketplace narrows its focus to its fastest-growing businesses. Chief executive Jamie Iannone told staff in a memo reviewed by Reuters that the cuts are part of a push to simplify operations and move resources toward the segments winning with buyers. Iannone wrote in the memo that the strategy is working, and that capturing the opportunity ahead requires careful choices about where to focus and invest. A company spokesperson confirmed the eBay layoffs to Reuters on Wednesday and said affected employees would be informed in the coming days. The move lands as eBay tries to sharpen its edge against much larger rivals, leaning harder into the corners of its marketplace where shoppers are still spending freely. The cuts will fall across teams that no longer sit at the center of the strategy, while hiring continues in the areas eBay considers strategic priorities, the company said.

Slimming down to chase the high end

This is not the first cut of the year. In February, eBay let go of about 800 employees, roughly 6% of its staff at the time, in an earlier effort to streamline the business. It reported 12,300 employees at the end of last year. The February round followed smaller cuts in each of the two previous years, as eBay kept trying to run a leaner operation. In the memo, Iannone described the latest eBay layoffs as thoughtful choices about where the company focuses and invests, according to Reuters, and said eBay would keep hiring in priority areas even as the cuts roll out. A spokesperson said the step was taken to keep the company operating from a position of strength.

eBay is reshaping itself around two kinds of listings: the expensive and the secondhand. The company has pushed into authenticated luxury goods, collectibles and refurbished products, categories that draw enthusiasts willing to pay more for scarce items. Collectors and sneakerheads have performed well for the marketplace for years, and eBay wants more of its business to look like that. That bet has paid off with investors so far: eBay shares are up nearly 40% this year, beating the S&P 500's roughly 12% gain, according to Reuters. Its $1.4 billion purchase of fashion resale platform Depop expanded its reach among younger consumers and strengthened its position in the growing re-commerce market. Resale has become one of retail's fastest-growing corners, which is why Depop's young, fashion-obsessed user base matters so much to eBay. It forecast third-quarter revenue above Wall Street estimates in August, and it reports its latest earnings next week. The second round of eBay layoffs trims costs around those growth bets.

Investors shrug as a billionaire keeps circling

The stock market response was muted. Shares rose about 1% in early trading after the news, Reuters reported, extending a strong run for the stock. eBay has also lifted its full-year outlook after posting revenue growth in recent quarters, according to the Wall Street Journal, as gross merchandise volume kept climbing. eBay has also become a takeover target: GameStop chief executive Ryan Cohen made an unsolicited $56 billion bid for the company earlier this year, which eBay rejected as neither credible nor attractive. Cohen has said he will keep pursuing a deal and has continued buying shares, according to the Wall Street Journal.

The message to shoppers is continuity. The marketplace keeps running while eBay concentrates spending on the segments growing fastest. The Depop deal gave eBay a direct line to younger buyers who treat resale as a first choice. eBay has beaten earnings estimates five straight quarters, according to CoinCentral, but this latest round of layoffs shows how far the company will go to keep costs aligned with its strategy. Restructuring waves have swept the wider tech and retail world all year, and eBay is keeping its own costs in line with the segments it is backing.