eBay is planning to cut 2,400 jobs in the first quarter as the online marketplace prepares to sell off its Paypal division as part of an efficiency drive.
The job cuts amount to 7% of its workforce and came ahead of its fourth quarter earnings report, which had topped expectations on Wall Street.
It said in a statement it wanted to refocus the businesses and ensure it was “set-up to compete and win”.
Ebay has also struck an agreement with activist investor Carl Icahn that will give investors a greater say in its PayPal payments unit once it is spun off and said it exploring a sale or public offering of its enterprise unit.
Investors cheered eBay’s moves, sending shares of the San Jose, Calif., company up roughly 2% in trading after the market’s close. The e-commerce pioneer also reported a 10% increase in net income for the fourth quarter, but sales growth came almost entirely from the PayPal and Enterprise units, not its initial online auction marketplace.
Overall, eBay revenue rose 8.6% to $4.92 billion, and net income increased to $936 million from $850 million a year earlier.
For this year, eBay projected sales of $18.6 billion to $19.1 billion, far short of the $20 billion projected by analysts. EBay said it expects $350 million to $400 million in expenses related to the split.