EBay lays off 2,400 after earnings tank

Could this be the beginning of the end for eBay?


In case you didn't know, 2014 was a bad, bad year for the online auction site eBay. The company was hacked more than once, earnings fell and eBay CEO John Donahoe told Business Insider, "quite frankly, we're glad to see [2014] come to an end."

But eBay isn't out of the woods just let. The company has warned that 2015 won't be a cake walk either. With the company sinking fast, eBay will be cutting around 2,400 jobs, or about 7% of its total workforce, to try and stay afloat.

So how on Earth could one of America's top companies be in so much trouble? Donahoe had plenty of reasons which he detailed in his latest earnings call.

"Q4 was disappointing. Significant events in 2014 have disrupted our ecosystem and overwhelmed the progress we were making on a number of fronts, impacting our performance."

"First, the password reset and SEO changes significantly impacted traffic, which did not recover in the second half as expected. eBay's loyal customers are back following the reset of our passwords, but our more occasional customers have not returned as quickly as expected in Q4."

There was also Google's implementation of Panda 4.0, which stripped eBay of 80% of its best search listings, due to its bad ad practices.

"We clawed our way back to where SEO traffic is more or less where it was before the event, but it's not yet driving growth and it's not yet driving the same new buyers."

Those are just a few of the issues and Donahoe warns, it's going to get worse before it's going to get better.

 

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I guess those employees out of work could always go into business for themselves by opening an eBay store now.

Cut salaries to report profit and gain profits from customers listing items to sell on the venue.

 

Tick off the sellers, and you lose business. They have been doing good things for buyers, but have been getting worse and worse for sellers. I (and others) have been trying to tell them they need to make it more seller friendly as well. Maybe they will listen now?

 

I have been less than impressed with them, their practices and communications lately. Maybe they will improve or someone else step in

 

Probably not! The only thing FleaBay listens to is.........cha-ching!

Chris

 

Loss of cha-ching means maybe they finally listen?

 

I really like ebay as a buyer. it's hard to find a lot of world coins. ebay has them.

 

This is exactly the problem for ebay. They are quickly becoming the go to place for low value items, but they have a very hard time moving higher dollar items.

 

They're making great strides, too, in their efforts to become the #1 source for counterfeits. Silently dropping enforcement of the "no fakes" policy has to be increasing their traffic.

 

many of the world coins are not so low value, but there are many low value world coins as well.

 

Their constantly increasing fees not withstanding, they are becoming much like the government with all the rules and regulations, favoring buyers over sellers, and even when they offer free insertions, they are making it stifling by making them auction only this new year, no re-listings of previously listed items, telling us we should offer free shipping and raise the price of the item to make up the difference. Buyers are not stupid for the most part, they do price comparisons and us little guys cannot afford free shipping. And we know if we raise the price of the item, they will go looking elsewhere. I am also on their subsidiary Half.com and saw almost no traffic last year. Their business model needs some serious repair. And hopefully some shifting of their corporate big shots.

 

I think shipping charges for the most part do not matter. I always offer free shipping, and here's why. As a buyer, if I want to spend $100 on something, I see how much the shipping costs first. If it is free, I bid $100. If it is $10, I bid $90. I end up spending the exact same, and the seller ends up getting the exact same. It really doesn't matter how much you charge if they buyer is only looking to spend a certain total anyways. Might as well offer free shipping and get the perks that ebay includes with it.

 

please name one major company in the us that listens to anything else

 

I think it's funny that people expect companies to exist for free and just be benevolent entities.

 

If they went back to negs for buyers, perhaps they could improve business.

 

From the amount of low quality, low dollar amount stuff that trades on eBay, it seems there are plenty of interested buyers, or just cheapskates who collect that range of material. Under a certain amount, after fees and sellers footing the bill for free shipping, there's no perk left to stand on. So sellers charge shipping and buyers ignore the listings. eBay doesn't want the transactions and this helps to underscore not selling such low value things, as you will be paying to give it away if you do list them and they sell. Perhaps if eBay allowed low value sales without charging sellers fees (or greatly reduced the fees) on auctions under a certain amount, but removed certain services (buyer protections and such), maybe a secondary eBay realm could exist for such low end material that met seller and buyer ideas.

 

The trouble if they were to do this is that these would be the low value highly problematic auctions. Sellers could place cheap and dodgy auctions in the knowledge that folk wont bother chasing them.

In the UK we don't get the eBay bucks that you have so I'm guessing things may be different here and still profitable. As eBay fees and postage costs increase, I find myself using ebay less and less.

 

I would imagine that would be the case and part of the risk of doing business like that. It would be a return to the Buyer Beware issues eBay had in the past, but if eBay could make users agree by T&C of using their platform that they can't seek to sue or ask eBay for support it might be like having a Craig's List platform within eBay. As it is, a lot of what doesn't go on eBay, goes on Craig's list or similar sites. Even taking a small (very small) commission, by volume it could challenge other sites for traffic and generate revenue for eBay. Removing incentives to buy like earning eBay bucks would also lower the cost of business for eBay involvement in such a low tier service.

 

That's one cha-ching!

 

Most companies (maybe shareholders) are getting too greedy and don't want to work harder than they can for their money. Even a small profit is a profit. The T&Cs are there for a reason and a rush to the gutter does no one any good.