Oct. 29 (Bloomberg) -- EBay Inc. will cut 325 jobs in its PayPal unit and take a pretax restructuring charge of $15 million, part of President David Marcus’s efforts to streamline the payment division and accelerate new products.
PayPal is also ending work arrangements with about 120 contractors worldwide, San Jose, California-based EBay said today in a statement.
Marcus is overhauling the payment unit, whose almost 13,000 employees are competing with startups such as Stripe Inc. and WePay Inc. that have been able to roll out services more efficiently. Marcus, who took over in April, so far has consolidated nine product groups into one and announced a plan to reorganize offices into a more collaborative environment.
“Unfortunately, making the right decisions on behalf of our customers meant we had to make some very tough decisions inside our company,” Marcus said in a blog post today. “This is a difficult day at PayPal.”
Workers who were notified of their termination today will be eligible for the employee stock-purchase plan, which closes at the end of the month, according to Anuj Nayar, a spokesman for PayPal.
PayPal accounted for 43 percent of EBay’s revenue last year, compared with 25 percent in 2007. While sales rose 23 percent to $1.37 billion in the third quarter, that gain was less than the 32 percent jump to $1.11 billion during the same three months in 2011.
Total payment volume climbed 20 percent to $35.2 billion in the three months ended Sept. 30. The unit had 117.4 million users in the period, a 14 percent increase from a year earlier.
“It is a healthy sign to see a company rationalizing operations,” said Douglas Greiner, an analyst at Compass Point Research & Trading LLC.
The $15 million pretax charge in the current quarter will be offset by an expected $2.5 billion in free cash flow for the full year, he said.
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