Speculation is building that eBay may be laying off up to 1500 workers soon. Barron's has reported it, and Reuters has repeated it. AuctionBytes, and Randy Smythe have mentioned it. And Scot Wingo at the eBay Strategies blog has asked what the impact on sellers might be. Will the 
layoffs really happen? Well, when there's this much smoke...
eBay Strategies primarily discusses where the cuts might be made. I think a lot of people may wonder what effect it will have on them personally as sellers and buyers.
Effects on the eBay Community
Laying off 10% of the employees may not have a direct effect on the average eBay user. However, it will continue the deterioration of the eBay business through perception. eBay may say they're "refocusing" or "reorganizing" or striving for "operational efficiency," but it won't pass the sniff test on Main Street. Layoffs are only considered good by Wall Street, most people think of layoffs as a sign of trouble.
First is the perception of the ex-employees. Laying off 1,500 people will sow the seeds of a thousand blogs. There will be people who have really worked hard to make eBay better. And they'll feel like they've been thrown under the bus for the sake of a misguided strategy. They'll be bitter. And they'll blog. They'll be sought out by newspapers. They will join other companies and work against eBay.
Second, the perception of the existing community. "Is eBay really doing that poorly?" "Can I trust eBay with my business?" Sellers will back off even more. Less sellers, less merchandise.
Third, consider how the general public will perceive it. Will eBay be able to persuade people to join and sell their stuff? No one wants to board a sinking ship. Perception is reality to many many people.
As a seller - things won't likely get better for you. The problem with eBay is not too many employees. The problem is that it's broken.
As a buyer - you won't feel as comfortable buying on eBay when news reports and blogs are speaking negatively about it. Also, with fewer sellers, there will be less selection. We only have so much time. So we'll go where we can shop, find what we want, buy it, and get out. It's what eBay wants to be, but they're not pulling it off.
Why the Layoffs?
eBay's stock price is about at record lows. Barron's reported that eBay's business is "deteriorating." In that situation, Wall Street likes layoffs. But it's a short-term fix. The stock may get a bump, but the problem remains. Management is on a course that seems to be running eBay in the ground. And there is no sign they'll change course.
Part of the situation reminds me of Yahoo's "Peanut Butter Manifesto" from 2006. The "leaked" memo talked about Yahoo's internal problems. One of the problems the author pointed out was:
Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like - rather than a leadership team rallying around a single cohesive strategy.
Sounds like eBay. People who don't really sell on the site, making decisions that affect people who do. Those decisions are often based on business school theories, and executive experience gained at brick and mortar enterprises.
Will eBay get rid of the right people? Ask yourself - have they made the right decisions over the past 18 months? More from the Yahoo "peanut butter manifesto:"
We have lost our passion to win. Far too many employees are “phoning” it in, lacking the passion and commitment to be a part of the solution. We sit idly by while - at all levels - employees are enabled to “hang around”. Where is the accountability? Moreover, our compensation systems don’t align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren’t adequately recognized for their efforts.
As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed.
The brain drain at eBay has been profound over the past year and a half. When I heard we wouldn't recognize eBay after the management got through with it, I thought they were predicting something better. Not this.
In any case, layoffs are for Wall Street - not Main Street. If layoffs occur, the cost will be greater than the gains in the arena of public perception.
{ 8 comments… read them below or add one }
I too have been on eBay for a very long time and as a seller with several businesses on ebay and on ebay motors, well, I made alot of money for a short while. After 911 things changed for me. Over time it got worse for me as an eBay seller, I felt like I was out there twisting in the wind being punished by eBay for simply offering a buyers service, as a result of actions brought to the forum by buyers, my block bidder list swelled, DBB’s and No pays surged and I was held account for it every time. So as all of this went South, I did a hiatus for two years trying to get away from the mistreatment of Sellers by blind sighted ebay seller policies and a lack of input/feedback in the area of paypal fraud and tranaction resolution cases only to be surprised that upon my return all was fixed and fees are lower, but the action is not there, instead I have a huge list of unsold items in MyeBay. Now ebay fully guarantees paypal purchases to make instant electronic transactions the main operative for doing business. But the costs for this are higher, I get charged by Paypal for a percentage of both the shipping and handling plus the amt of winning bids. This is unfair. Furthermore I am not allowed to accept any other payment method which also limits my ability to appeal to customers as I offer very low prices in the antiques, rare book and vintage computing catagories. BTW, not every geek carries a paypal credit card. The problems also started by a two fold assault on sellers with half dot com and the acquisition of paypal-as I recall during a timeframe that twarted business online in a short period. This on both fronts essentially made ebay a double dipper. They got you coming and going on both sites. I think at some point pure greed set in and became the driving force which fueled an operative by which sellers became discouraged and felt that they were on the losing end of most any deal, especially those the effected inventory losses and replacement costs, consequently, sales have fallen due to the mistreatment and bad temperament by ebay staff in regards to transactions which, for a long time favored only buyers if a transaction went awry. It is most difficult for me to replace merchandise purchased by someone who received it and then reversed the paypal transaction on me, having filed a complaint that it was not received or it arrived broken. Tracking numbers do not guarantee delivery, INSURANCE does not insure a good transaction, not everyone can be at their residence for signing of delivery, not every tracking number is verifiable by ebay stgaff. In essence this all came to a head in 2006 as it was demanded that sellers pay some kind of price beyond just selling, for selling. The cost of doing business skyrocketed when ebay refused to place the burden of proof on buyers for the receipt of goods when they [the buyer] screwed up, had a rip off attitude or perpetrated fruad using paypal as “electronic deception” for transactions on ebay in the “purchase” of items they refused to admit they ever received when in fact they did. I even caught buyers selling my items they said they never received, I contacted ebay and got no justice. This became such a problem many people including myself stopped shipping over seas, esp to places like great Britain, Canada and Greece, places full of scammers where there is no home postal delivery, if you have ever lived in Canada or overseas you will be well aware of such problems as there is no real post office service like we have and take for granted. These countries all have a horrible track record with customers reversing payment when they did not like what was purchased offered as is and/or lost packages, not picked up, what have you.
I used to collect rare old books and sell them on half.com. After over a successful year and a half of doing this, in 2002, I was told that I would have to “merge” my account-with what else? eBay of course! No explanation or business strategy was provided, you did as you were told or else-no input or feedback allowed in this regard. This idea sucked and ruined my repeat customer business on half.com. There, my customers gladly paid by personal check or IMO as purchases were not high end items and half.com compeated directly against me with .99 cent deals of the same book no matter what it was. When my repeats left, so did I. Now things are “better” on ebay, fewer disputes, instant payments are not reversed and I just sell all of my rare books there. However, I pay higher transaction fees with paypal taking a percentage of both the bid and s&h totals. This is wrong, why should I pay for part of a shipping and handling fee? [esp. when all S&H is what is required for the "lucky winner" to pay for themselves to receive the items in the first place to fullfill the order, what is this the olde soviet union?] If a buyer does not want to pay for this and insists on using the free shipping trend, I just ask them not to bid (politely I might add…). You win some and you lose some and in this case *ebay* is the loser in the long run… sales not driven for sellers by a venue that really backs up their own clientele…well that is a venue that will cruble in time, suddenly, like now it will do so very fast and this for me, and for my buyers who like to save money, is disfortune.
I agree – eBay has totally blown it – we have been sellers on eBay for 10+ years and their service is getting worse and worse – Now there a little things that seemed to have stopped working completely – I have tried the live desk it isn’t working (2 days now) – I have emailed no reply yet – I’m starting to think that there is no one there. If the CEO donahue (who was at wal-mart) thinks he’s going to turn eBay into Amazon he really has no Ideas or new concepts and eBay will FAIL – FAIL – My questions is with the void left with eBay who and what site is going to step in and there will be a need for a new eBay – anyone have any ideas (better than donahues?)
beware
I love ebay, and I certainly hope they make it through these tough times! I also liked Meg at the helm and thought the BIG spend for Skype was soooo gutsy, and may eventually pay off? However, now that things are in deep boopy land everywhere, I think Meg’s buying Skype may turn out to be a goof… oops! Also, if Meg is an advisor for Sen. McCain, then we might be in serious deep doodoo if he wins?
The reason ebay is losing business is, raising fees on everything, paypal fees. It’s simple sellers do all the work and ebay makes all the money.
@eBay doctor
Well, maybe you got laid off for not knowing that the lightning comes before the thunder.
What a knucklehead. http://tinyurl.com/69u9o3
Thanks for the comment.
I got laid off from Boeing with a few thousand other people! Did people stop flying on Boeing aircraft?
Ebay whiners cry louder then thunder but I see no lightning!
lets hope 2 of the lay offs are grif and john donahoe. ebay blew it. it was the sellers who paid the fees, they never seemed to grasp that. amazon is going to have an amazing christmas this year. eBay’s stock won’t be worth $5 by next year’s 4th quarter. business students will study the implosion and poor management for years.