EBay makes 1,000 redundant

7 Oct 2008

EBay has announced two acquisitions and at the same time said it will make 1,000 staff worldwide redundant.

The online auction site will pay almost $1 billion (£540 million) for US online payment company Bill Me Later, and around $390 million (£222 million) in cash for the operator of two Danish classifieds sites, dba.dk and bilbasen.dk.

Bill Me Later is second only to PayPal, the online payment operator that eBay already owns, the company said. The two services complement one another, with Bill Me Later able to offer delayed payment or financing options to eBay customers using PayPal, it said.

EBay will pay $820 million in cash and $125 million in outstanding stock options. It expects to close the deal by the end of the year.

The Danish classifieds sites, one linked to newspaper Den Blå Avis and one for automobile buyers, will bring eBay an additional 186 million monthly page views, the company said. It now owns classifieds sites covering 1,000 cities in 20 countries.

Alongside these acquisitions, the company said it will lay off 1,000 staff and several hundred temporary workers. The worldwide layoffs will allow the company to cut costs, it said, although they will result in restructuring charges of up to $80 million [M] in the fourth quarter.

EBay now expects to exceed its previously announced earnings expectations when it announces its third-quarter earnings on 15 October, although revenue will be at the bottom end of the range it indicated in July, it said Monday.

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