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EBay Cuts 1600 Jobs

EBay [EBAY] is shaking things up in its corporate offices after making a series of changes to its site to keep usership high. The auction site announced today that as a result of this re-strategizing, it will be cutting 1600 jobs, which amounts to the biggest round of layoffs in the company’s history. The cuts will make up 10% of the company’s workforce. Only about 1,000 of the jobs will be full-time positions; the other 600 will be part-time and temp positions that will remain unfilled permanently. They will not all be domestic jobs.

The company’s CEO, John Donahue, says the cuts are a result of a slumping economy. The company will invest the money it saves in growth areas like PayPal and the newly-acquired BuyItNow consumer credit company.

“This is trying to position our company in the right way for the medium to longer term. I would say it is not a reaction to the short-term macro environment, or short-term pressures,” Donahoe said in a statement.

This is the second round of cuts by eBay this year. The company has already alienated much of its seller base by restructuring its fee system in a way that raised listing fees. The news that it will be cutting its workforce while spending money on BuyItNow — which will cost them about $820 million plus $125 million in options — could make the company seem insensitive, at a time when it most needs to grow its user base.

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