Even the Internet is feeling the pinch of the economy.
This story first appeared in the October 7, 2008 issue of WWD. Subscribe Today.
Auction site eBay on Monday said it intends to lay off a portion of its workforce, including 1,000 employees, and buy alternative payment company Bill Me Later.
The company said the layoffs are designed to cut costs and streamline its organization.
“We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,” eBay president and chief executive officer John Donahoe said.
Alternative payment systems, such as PayPal, which eBay also owns, have been growing as online retailers look for new ways to boost conversion rates.
The Web site will pay $820 million in cash and approximately $125 million in outstanding options to acquire Bill Me Later. The company also said it has bought Danish classified site dba.dk and vehicles site bilbasen.dk for approximately $390 million in cash, making a total spent on acquisitions of more than $1.3 billion.
Indicating the explanation for the layoffs, eBay said it expects to “hit the low end” of its revenue guidance for the third quarter. The company releases results Oct. 15.
The economy clearly has been taking a bite out of the company’s business. Traffic at eBay and eBay Motors was down 12 percent for the week ended Oct. 4. Traffic at eBay alone for the month of September was down 11 percent compared with the same month a year earlier, according to Hitwise, which does not disclose unique visitors.