posted on September 16, 2008 05:50:39 AM new
How Would an eBay Layoff Impact Sellers?
by: Scot Wingo posted on: September 15, 2008 | about stocks: EBAY Font Size: PrintEmail This weekend, a Barrons article cited a report by an investment research firm, Wedge Partners (Brian Blair and Ryan Hunter) that says eBay is planning a 1500 person layoff.
Reuters has re-reported the story as well here. The big question I'm hearing from ChannelAdvisor customers and readers is: What will eBay layoffs mean for sellers?
Where are the people?
With 16,000 people in the company this would be a < 10% reduction. Given that eBay hasn't really gone through this before, I'd guess this can be done with little to no impact on operations.
To understand the impact on sellers, we need to think about where the cuts will/would come from. While eBay doesn't report a break down of the 16k, we can guess where the pockets of people are. If you peel the onion on eBay you have:
Paypal - Paypal is the crown jewel of eBay and has grown substantially head-count wise over the last years. Here's where the people are:
Paypal has the business people in San Jose at their own campus.
Paypal has tons of customer service/fraud prevention people in Omaha/Salt lake. I don't think it would be prudent to do anything here given the busiest season starts now.
I'm going to guess Paypal has limited business people internationally, but probably big fraud prevention teams in their customer service center.
Skype - Skype is probably a 1000 person company at this point and it's a given that it's the fastest growing part of eBay.
eBay marketplaces -
I'd guess that 8k of the 16k people are at eBay marketplaces and housed at the 'mother ship'.
2125 Hamilton is the home of eBay Park which you can tour on gmaps with their cool 'Street View' (click here, zoom in and select street view - look to your left for the 4 buildings by starbucks and to your right for the other 4.)
With 8 very large building's I'd say there are a good 4-6k people in that park. This report from 2003 cites 1500 out of eBay's total of 4200 at the time, so I'd imagine that number has more than doubled in the last 5 yrs (wow - eBay's headcount has gone up 4X since then!). So let's say 5k in eBay Park
That leaves 3k that I' would say are about 1000 international and 2000 in Salt Lake.
The international offices are run pretty lean with most functions being supported out of the US (engineering and admin for example).
Misc
There are small offices in LA, SFO and a variety of other places from acquisitions (StubHub, rent.com, etc.)
Where are layoffs likely?
This is all speculation on my part, but logically it seems like it wouldn't be prudent to do anything at Skype, Paypal or places like Stubhub that are big growth drivers. Thus you're left with eBay marketplaces which is the anchor to the conlomerate and should bear the weight of any downsizing.
Within eBay marketplaces, I don't think International has room for much change, therefore you're left with the 2k people in SLC and the 5k people in SJC.
This is where it gets tough. Ebay has talked up the benefits of increasing customer service and TnS staff in SLC with Wall St. That could make it hard PR-wise to cut there.
That leaves 5k in SJC at the most risk IMO. If the 1500 were localized to that group, what looked like 10% now becomes 30% which is pretty deep and risky. In eBay Park you have:
Lots of 'admin' - finance, HR, legal. I think one whole building floor is just legal. With eBay's legal issues though, this could be an area that's hard to reduce.
Seller experience - possibly impacted
Buyer experience - probably not impacted as eBay doesn't want to be seen underinvested in such a strategic area.
Marketing - probably impacted. With eBay spending less and less on marketing, there are probably big reductions that could be made here
Engineering - most of eBay's R+D is done in SJC with some pockets outsourced to India and other places.
eBay Motors - Motors seems to replicate lots of the functions at other parts of eBay. I'd guess lots of synergies could be found by undoing all of this duplication of effort.
CS+TnS - eBay has some functions like community, customer service and trust and safety with some headcount in SJC that largely creates policies for folks in SLC. There maybe room there to trim as well
Middle management - eBay has lots of VP, Manager, Director level people that JD may look at eliminating as a way to streamline decision making. Most eBay employees are at least 5+ layers away from JD which seems ripe for bureaucracy.
What's all this mean for sellers?
If I'm wrong here and SLC is hit with the bulk of the layoffs, that's where 90+ eBay TSAMs are (Top Seller Account Managers). That would be bad for sellers as that group is the lifeline a seller has into eBay. However, if customer service or trust and safety in SLC are decreased that wouldn't directly impact sellers, but it could hurt the buyer experience (which is why I don't think it will be an area that is touched).
Seller development is at risk, but I think it's a smaller group so probably not something that would be cut deeply. Any admin, marketing or other cuts are likely to not
All in, I'd say there's a low (10-20%) that any reductions would impact sellers, but until we see what eBay does, it's all a guessing game.
Disclosure: Author is long Google and eBay.
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Watching
the Wheels
Sep 15 11:14 AMWell since customer service is essentially non existant, unless you are producung substantial numbers, a cut here would be irrelevant. Report abuse
redbaron
Sep 15 11:14 AMLots of analysis, Scott, but very few, if any, real conclusions. Not very helpful, IMHO. Report abuse
J.Donahoe
Sep 15 11:34 AMIf you ask me they should get rid of all there employees, mostly Donahoe, they are all useless. Customer service does not exist, so get rid of those non value added overhead morons! Get rid of all the cooperate heads whos greed overshawdowed reality in every way. Get rid of all the page delopers who cant create a search to save there lifes. Get rid of them all they are useless. Where are the people who created the real Ebay, get them all back in there and start over. Jail all the greedy Cooperate thiefs! Im sure the FBI is investigating the corruption with there inside trading and large company perk diamond sellers who Donahoe is trying overrun the sellers market. They just made mistake after mistake. I have no symphthy for them what so ever!! They screwed over the eBay community now it's Ebays time to suffer for there greed Report abuse
Phlago
Sep 15 11:53 AM
My WebsiteIt's not really going to impact sellers. They have provided sorry customer service for years now, and it's just more of the same. Perhaps if they focused on their core customer base, and put the attention back on those who put them on the map, things might change. Won't happen. It's corporate greed at its finest. They've abandoned us moons ago, and now they are suffering the consequences of that which they created. I now use AlsoShop (alsoshop.com) along with many other auction alternatives and no longer contribute to the economy of feebay. I like to think that me leaving has caused them great financial strain and put them into their current situation. At least it makes me feel better. Ha! Report abuse
aberdasher
Sep 15 12:12 PMAs an Ex eBay employee, I left over my disgust of where the company was going. I am a from TSAM and found our duties go from that of business growth for our accounts to simply a glorified and high paid babysitters just there to keep the big sellers happy but yet we had no powere to do anythign for them other to listen to their complaints and say I am sorry I understand but unfortunately there is nothing I can do for you. We were not paid on how well our accounts performed, so there is no incentive to teach them to be better. I think with the new changes and in October there will be MORE, especially to 20 - 30 estimated BIG SELLERS who have never been on eBay yet will begin as diamond PS and pay NO insertion fees listings hundreds of thousands of items, nor will they have placement based at all on DSR's or feedback %. This will cause current big sellers still paying fees to be further edged out. This means there is even less need for a TSAM group. I expect most all of the jobs will come from SLC. That entire division will be closed and it will be moved up to Vancouver. Salt Lake City employees are over paid for what they do much more so that those in Vancouver, but if they were allowed to actually do their job descriptions this company would be entirely different. Each TSAM makes over $40K per year, not bad for simply apologizing to sellers and offering them nothing at all for all their hard work and fees they pay. Not to mention the other 1,000 plus employees at SLC. Most of their duties have already been moved up to Vancouver over the past few years. With the BIG sellers comming in there is no need for the lower level seller support as if you are not one of those new BIG sellers you wont be able to get found therefore no sales, no need for support. Buyer support is already in Vancouver. Trust & Safety will no longer be an issue as those have been moving to SJ over the past couple of years. It really has been a sad state of affairs to give all you have for a company for so long only to see them run it full speed into the ground without any concern for those who use or work for them. i will miss eBay Report abuse
jay dee
Sep 15 12:13 PMWhat a load of more ambiguous financial gobbledy-gook - I don't have a clue as to what all your acronims and analysis is about.
I am a small seller - I list, I sell and I mail in my fees to ebay.
The only ebay seller contact I have are the obnoxious notices from ebay
that I should lower the price of my items (so ebay can make their cut) or that they haven't received my payment soon enough (they have received it within 30 days - but still want it sooner).
Ebay is way overstaffed with nerds who have nothing better to do than dream up ways to aggravate the #*!@ out of people with their so called improvements, constantly changing forms and procedures that have been working fine
They really don't get the simple premise that drives the whole thing : people list items, other people view them and if they NEED or WANT the items, they purchase them.
No amount of "improvements&quo... and flowers and fancy borders in the ads will make someone buy something they don't want or need. They (ebay designers) are pretty stupid if they think otherwise.
There is a saturation point in our society / world that only so many people want to shop or buy in this manner.
I am not a conspicuous consumer and buy virtually nothing on ebay - I prefer to see and examine what it is I'm buying. I like to deal face to face and know where to go if I have a problem : ala AJ Foyt with tools (Sears / Craftsman TV commercial).
All Ebay and the financial world think about is how to try and ensnare the whole universe into buying every last thing online.
Maybe all you financial "brains' should purchase your spouses on ebay too - no test "drive" - what do you think of that idea ?? Report abuse
J.Donahoe
Sep 15 12:56 PM
I dont understand, How can they be laying off when you look at job opportuniies at ebay.com? Is this a way for ebay to raise there stock prices?? It seems ebay is up to there fraudlant selfs again. Lay offs mean stocks rise, but they continue to hire people more thann ever. Crooks!!!!
Customer Solutions Agent 29947BR Customer Support US - Nebraska - Omaha PayPal Omaha 15-Sep-2008
Search Marketing Manager 29635BR Marketing / Sales US - California - San Francisco StubHub San Francisco 12-Sep-2008
Fraud Analyst 29941BR StubHub San Francisco 12-Sep-2008
Internet Marketing Analysis Manager 25798BR Marketing / Sales US - California - San Jose eBay San Jose 12-Sep-2008
Fraud Analyst 29882BR Trust & Safety / Fraud US - California - San Francisco StubHub San Francisco 12-Sep-2008
Microsoft Great Plains Developer 29735BR Tech - Software Engineers US - California - San Francisco StubHub San Francisco 11-Sep-2008
Analyst, IM/Advertising Operations 25792BR Marketing / Sales US - California - San Jose eBay San Jose 11-Sep-2008
UI Designer 29926BR StubHub San Francisco 11-Sep-2008
Sr. Manager, Storage Operations 26939BR Tech - IT / Operations US - Arizona - Phoenix PayPal Phoenix 11-Sep-2008
Principle Storage Engineer 26938BR Tech - IT / Operations US - Arizona - Phoenix PayPal Phoenix 11-Sep-2008
Director, Business Continuity Planning 25975BR Tech - IT / Operations US - California - San Jose PayPal San Jose 11-Sep-2008
Research Scientist 29900BR Tech - Software Engineers US - California - Brisbane Shopping.com USA 11-Sep-2008
Community Support Representative 29905BR Customer Support Philippines - Makati City PayPal Philippines 11-Sep-2008
Software Engineer 27572BR Tech - Software Engineers US - Nebraska - Omaha PayPal Omaha 11-Sep-2008
MTS L2 Engineer 28501BR Tech - Architecture US - Nebraska - Omaha PayPal Omaha 11-Sep-2008
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Fruit
Helmet Cat
Sep 15 12:57 PM
My WebsiteWell Ebay has already outsourced part of their T&S to the international countries. They did that 2 months ago. It'll affect buyers & sellers because you cant report a german or thailand registered seller that is displayed on the US ebay.com site and get any follow through. Because of the outsourcing/mgmt responsibilities of T&S, your confirmation comes back in German language. lol.
And their customer service contact form now has nothing relevant to the questions.
Whatever ebay does impacts sellers. besides, they're moving towards a type of PPC / adwords/ comparison shopping model it seems anyways. Soon they wont need all those bodies. They'll just focus solely on relationship management
Report abuse
EBays
biggest fan
Sep 15 09:43 PMI just realized that I am stupid. The article CLEARLY indicated that the layoff is not from an official EBAY source. So, that means that it is absolutely okay for them to continue hiring. I am just dumb and stupid to call them crooks without properly justifying for it.
Also, I am so dumb that I didn't even know what layoff really means. By laying off employees, it doesn't necessary means that I can't continue to hire. I just can't hire for the same position, but I can still hire talented employees, which I am too dumb to qualify for anyway. Report abuse
keeperspring
s
Sep 15 09:55 PMLayoffs should start at the top with John Donahoe first and Lorrie Norrington next.....then you end up having a 2 person layoff.....morale would be better and the people that need the money the most get to keep their jobs.......JMHO Report abuse
J.Donahoe
Sep 16 12:48 AMPlease stop being such soretails. The changes made to eBay is best for the future of the eBay community.Seller satisfaction is high, and listings are up. Report abuse
EventHorizon
1984
Sep 16 05:32 AM"What will eBay layoffs mean for sellers?"
Nothing. Human Customer Service is near non-existent, and a decrease in eBay CS personnel would not be noticed. And due to high IT (computer) department turnover, even with impending code monkey cuts system software will remain buggy.
But this topic is moot. Checking elsewhere, some stock analysts won't be mollified unless there's a 20% cut in personnel. Report abuseHave your say! Add your comment:Name / Pseudonym: change
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Gulag-a Soviet era concentration camp is now reincarnated as EBAY with 13,000 rules.
posted on September 16, 2008 06:28:33 AM new
The article was too long for my limited attention span. After the first couple paragraphs all my brain saw was blah blah blah.
Everyone is effected(except the rich) as you may already be aware, by the economy which in the dumpster. A few million workers are or soon will be pinked slipped. This will drasticly reduce sales of everything except food, fuel, booze, & drugs.
This may create more sellers trying to get rid of stuff to buy the above listed items. Because no one else has any extra money to spend on eBay or Walmart widgets. Its gonna be a long cold dark winter for us all.
posted on September 16, 2008 08:48:27 AM new
hwahwa...thank you for posting that. I found it very interesting.
In my experience...most Companies that grow into enormous Corporations very quickly have that 'fat around the middle'.
As the article says, they have a large number of Middle Managers and probably Supervisors. Maybe they do not need to lay off people but to do a complete evaluation of the Job Titles and put the employees skills to a use that would in the end be more beneficial to everyone's bottom-line.
1.Simplify the system.
2.Allow Customer Service Reps to actually GIVE service to the Clients by using their brains instead of pre-made scripts.
If they still feel that they need to cut some fat then I suggest they start at or near the top. I know that John Donahue did not personally think up every one of the changes that have and are being made so he should look closely at his advisors.
posted on September 16, 2008 09:34:29 AM new
The comments posted below is more interesting read-30-40 new platinum sellers coming soon who pay no listing fee and get higher visibility ,and layoff should begin from the top starting with the new CEO!
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Gulag-a Soviet era concentration camp is now reincarnated as EBAY with 13,000 rules.
