EBay Inc (NASDAQ:EBAY) plans to cut its workforce by 7 percent, or 2,400 jobs, in the current quarter and is exploring a sale or public offering of its enterprise unit as the e-commerce company prepares to split from its payments division, PayPal, this year.
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The jobs will be cut across the marketplace, payments and enterprise divisions, eBay said on Wednesday in its fourth-quarter earnings report.
EBay said it entered into a standstill agreement with Carl Icahn, its largest active shareholder, and appointed to its board Icahn Capital executive Jonathan Christodoro. It also is adding two Wall Street bankers to its board, expanding the number of directors to 15.
PayPal agreed to adopt a number of measures proposed by Icahn, which the billionaire said enhanced corporate governance at the payments giant.
"Looking forward to 2015, we will be simplifying organizational structures to focus the businesses and ensure that we are set-up to compete and win," eBay said.
Restructuring and separation costs are expected to be between $210 million and $240 million in the first quarter and $350 million to $400 million for the entire year.
The U.S. e-commerce company plans to split its marketplace division from its fast-growing payments arm, PayPal, in the second half of this year. PayPal will be a standalone publicly traded company that some analysts say will be worth $40 billion.
EBay is also exploring a sale or an initial public offering of its enterprise division, which helps retailers around the world beef up their online presence. The company said the unit did not fit neatly with PayPal or the marketplace division.
"It has become clear that it has limited synergies with either business and a separation will allow both to focus exclusively on their core markets, as we create two independent world class companies," eBay said.
EBay earned 90 cents per share in the fourth quarter. It was expected to earn 89 cents per share, according to the average analyst estimated compiled by Thomson Reuters I/B/E/S. In the year-ago quarter, it earned 81 cents per share.
(Reporting by Deepa Seetharaman; Additional reporting by Edwin Chan; Editing by Leslie Adler)
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