EBay Inc. is not just splitting up, it’s also slimming down.
The e-commerce giant said it would cut its global workforce by 7 percent, eliminating about 2,400 jobs across its eBay Marketplaces, PayPal and eBay Enterprise businesses.
After months of prodding from activist investor Carl Icahn, the company said in September that it would separate the eBay e-commerce business and the quicker-growing PayPal. On Wednesday, the company went one step further and said it would also explore strategic options, including a sale or initial public offering, for the eBay Enterprise unit, which helps large retailers manage their e-commerce businesses.
Investors gave their nod of approval by sending shares of the company up 2.3 percent to $53.38 in after-hours trading.
The company also reported that its fourth-quarter net profits gained 10.1 percent to $936 million — although the gain wasn’t enough to pull the company into the black for the year. Losses for the 12 months tallied $41 million.
In a statement, John Donahoe, president and chief executive officer, sounded like he was trying to be diplomatic about the company’s problem child.
“PayPal had another strong quarter, finishing an excellent year,” he said. “EBay, while facing challenges, continues to be a great business and is focused on stabilizing performance and engaging its core customers.”
The gross merchandise volume that was processed by eBay Marketplaces grew 9 percent last year to $83 billion. But the company said, “Traffic was impacted by both the decline in new users due to [search-engine optimization] changes and the occasional buyer not returning to our site or being met with increased friction due to the password reset when they did come.”
The marketplace business was also hurt by the rising dollar, which hurt exports from the U.S. “We are taking decisive action to focus the business in an effort to simplify and speed up decision making while realigning the cost structure to create capacity to invest,” the company said.
EBay also reached a standstill agreement with Icahn, its largest active shareholder. Icahn Capital executive Jonathan Christodoro will join the company’s board.