• by Laurie Sullivan , January 24, 2024

Public companies this year have found a way to eliminate employees. Some cuts have managed to push up stock prices, and others not so much. eBay on Tuesday said in a company letter it would reduce its “current workforce by approximately 1,000 roles or an estimated 9% of full-time employees.”

By Wednesday morning the stock price fluttered around $41.60 -- up by pennies. Google’s stock price in the past five days jumped about $7 after media reports of continued layoffs.

Companies always feel pressure to cut costs -- and to the greatest extent at the beginning of the year to give them a fresh start and boost to stock price.  

Colin Sebastian, senior research at Baird Capital, has an eBay price target of $48, despite the key risks of online consumer spending trends, core marketplace growth, and competition from Amazon, Google, as well as emerging marketplaces Poshmark and StockX.

eBay’s restructuring plan, which the company’s CEO Jamie Iannone announced late Tuesday, focuses on accelerating the process of making decisions and “right-sizing after a period where expenses grew faster than the business,” Sebastian wrote in a research note published Wednesday.

“While there are limited details in the release about the organizational changes, the company expects this to improve the end-to-end experience of customers (buyers and sellers),” he wrote. “We don't believe a reorg of this magnitude was a reaction to near-term business trends, but rather was likely months in the planning.”