EBay Cuts 10 Percent of Its Workforce

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EBay.com, which has almost doubled its staff since 2005, will cut 10 percent of its workforce as sales growth slows at its Internet marketplace unit.

The world's largest online auctioneer will purchase online-payment service Bill Me Later for $945 million and merge it with its PayPal payment unit. The company also agreed to buy two Danish classified Web sites for $390 million in cash.

The firings will affect 1,000 employees and several hundred temporary workers, according to the San Jose, California-based company.

EBay is expanding its payments unit, which now contributes 28 percent of revenue, after reporting its slowest revenue growth since selling shares to the public in 1998.

EBay said the purchase of Bill Me Later, which gives users the option for deferred payments, will reduce adjusted profit by 3 cents to 5 cents a share in the fourth quarter and another 6 cents in 2009. It will start adding to earnings in 2011, the company said.

Ebay.com now waits for a sale to complete before charging fees to the seller, in the hopes of boosting sales and defending against the largest online retailer, Amazon.com.

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