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EBay faces some struggles but may emerge stronger in 2015

January 22, 2015

E-commerce can be a competitive industry, especially for the larger players. EBay's recent moves indicate that the company is facing some difficulty, but intends to keep on keeping on.

E-commerce can be a competitive industry, especially for the larger players. EBay’s recent moves indicate that the company is facing some difficulty, but intends to keep on keeping on.

EBay will lay off 2,400 workers in Q1
USA Today reported that EBay beat earnings expectations on Wednesday, but the company also indicated that it would reduce its global workforce by approximately 7 percent in the first quarter of this year. The company’s share values fell after news of the earnings release but bounced back slightly after it was announced investor Carl Icahn’s company would have a seat on the board of directors.

Bob Swan, chief financial officer of EBay tried to calm investors with a statement, citing a decrease in traffic and repeat customers in the company’s online auction website as reasons for the slow down, reported The New York Times.

“It’s going to get a little bit worse before it gets better,” said Swan, according to the news source. “Our ecosystem has simply been disrupted.”

The company has plans in 2015 to improve performance
The e-commerce firm plans to explore strategic options for EBay Enterprise, which gives advice to retailers on e-commerce. The company indicated that a spin-off or initial public offering may be in order, reported USA Today.

The New York Times noted that the company would also spin-off  PayPal, the company’s payments subsidiary. Since PayPal is the faster growing entity, Icahn has suggested that both companies would be better off if PayPal operated as a separately traded public company. EBay executives were not enthusiastic about the idea at first, but they eventually acquiesced.

New blood may be a good thing for EBay
On Wednesday, after the company announced that it had appointed Icahn Capital executive Jonathan Christodoro to its board of directors, share prices jumped by 2 percent and EBay issued a forward looking statement regarding 2015.

“Looking forward to 2015, we will be simplifying organizational structures to focus the businesses and ensure that we are set up to compete and win,” said the company, according to USA Today.

Ultimately, 2014 was a big year for e-commerce companies. Amazon opened physical stores in New York and California, Alibaba had its IPO and listed shares on the New York Stock Exchange, and Apple released its much-anticipated mobile payments technology – Apple Pay. Perhaps 2015 will be the year that EBay makes the headlines and steals back some market share and media attention from its rivals.

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