eBay to lay off 1,000 workers as tech job losses continue in the new year

Online retailer eBay is shedding 1,000 jobs, or about 9% of its workforce, as the company faces a business slowdown that is rippling across the technology industry.

In a blog post, eBay CEO Jamie Iannone wrote that the size of the company's staff and its expenses "have outpaced the growth of our business," which he said prompted the terminations.

In addition, eBay is ending its relationship with many outside contractors.

Both moves, Iannone wrote, are part of an effort to stay more "nimble" in the face of a "challenging" economy.

Founded in 1995, eBay is an early internet pioneer that has survived decades of changes and fierce competition in the world of e-commerce. Today, it is a $21 billion company with nearly 12,000 employees, but its core business has been chipped away over the years by Amazon and other online marketplaces.

While it has been largely insulated from the downturn in advertising spending, since it makes most of its money off sales commissions, a sales slowdown at the online platform has hit eBay's bottom line.

The 1,000 layoffs announced on Tuesday follow a previous staff cut in February 2023, when it sacked 500 workers, as the company attempted to adjust to flagging sales demand after pandemic boom times.

The staff contraction at eBay comes as dozens of other tech companies, including Google, Amazon, and recently, TikTok, have collectively laid off thousands, with executives saying they are still shaking off workforces glutted from the pandemic.

Just four weeks into 2024, dozens of tech companies have laid off nearly 11,000 workers, according to layoffs.fyi, a site that tracks job cuts in the sector.

Iannone, eBay's CEO, said employees who have lost their jobs will soon be notified through a Zoom meeting. He requested that all U.S. employees work from home on Wednesday, when many of the layoff notifications will be delivered, to "provide some space and privacy for these conversations."

Earlier this month, eBay agreed to pay a $3 million settlement to resolve a criminal probe into a cyberstalking and harassment campaign led by former eBay employees in which live spiders and a bloody pig face mask were sent to the home of a Massachusetts couple who published a newsletter that focused on eBay sellers and executives.

 Japan's biggest business lobby Keidanren and trade unions kicked off annual labour talks on Wednesday that may pave the way for the central bank to exit its decade-long super-loose monetary policy.

The talks come a day after the Bank of Japan (BOJ) took a hawkish turn in policy even as it maintained its accommodative monetary settings, with markets increasingly betting on a shift towards normalizing rates in March or April.

Japan's big firms are expected to offer their unions wage hikes of 3.85% on average this year, the highest wage increase in 31 years, according to a poll of 37 economists conducted Dec. 25-Jan. 9 by Japan Centre for Economic Research, a private think tank.

The 3.85% estimate beat last year's three-decade high of 3.6%, the biggest gain since Japan's asset bubble burst in the early 1990s. An agreement for a 3.85% hike would mark the fastest growth in annual pay since 1993 when wages grew 3.89%.

"This year, we are aiming for wage hikes that beat inflation to achieve structural wage hikes," Keidanren chief Masakazu Tokura said in a video message, underscoring the importance of improving labor productivity through sustainable wage hikes.

Tokura stopped short of specifying target pay hike levels.

Since last year, several major firms have already announced their intention to deliver large pay hikes, though struggling smaller firms have lagged behind.

Small firms that employ seven out of 10 workers hold the key to wage hike talks and their ability to pass on costs to their bigger clients would determine if they can jump on the bandwagon of higher pay.

BASE PAY

In terms of the impact on Japan achieving sustainable inflation, key criteria set by the BOJ to exit its easy policy, base pay hikes matter more than the seniority-based automatic annual raise built into the pay scale, analysts say.

Base pay rises of 3% would be enough to meet the BOJ's 2% inflation target, they say. At the moment, however, the base pay gains fall below that level.

Of the overall hikes of 3.85% expected by analysts for 2024, base pay rises make up 2.15%, while seniority-based automatic annual wage hike is 1.7%, according to the poll of analysts.

Rising base pay feeds into increased fixed labor costs, burdening companies with higher costs of retirement fees and pension payments.

It's a key reason why many Japanese firms shied away from base pay hikes for years when the economy stagnated in the early 2000s.

On the same day United Airlines said it would consider alternatives to Boeing for its next airplane order, the manufacturer announced a one-day work pause at its Renton factory for employees to learn and focus on quality assurance. 

Boeing 737 MAX workers from the production, delivery, and support teams in Renton will spend Thursday participating in working sessions, the company said on Tuesday. It is the first of many “Quality Stand Down” days Boeing will host over the next few weeks at its factories. 

Employees will participate in “hands-on learning, reflection, and collaboration,” Boeing wrote in a note sent to all commercial airplane employees and posted on its website. The goal is to identify quality and compliance improvements and create actionable plans, according to the note.

Stan Deal, Boeing Commercial Airplanes chief executive officer, said in a statement the sessions will allow “all teammates who touch the airplane to pause, evaluate what we’re doing, how we’re doing it, and make recommendations for improvement.” 

The pause is part of a list of immediate actions Boeing plans to take following the Alaska Airlines Flight 1282 safety incident earlier this month when a panel blew off a 737 MAX 9 fuselage mid-flight. That panel was a door plug filling a space that some airlines use as an emergency exit. 

The flight landed safely in Portland but the incident has heightened scrutiny of Boeing and Spirit AeroSystems, Boeing’s supplier that builds MAX fuselages.

The Federal Aviation Administration grounded the 737 MAX 9 planes that filled the open space with a door plug shortly after the incident. Those planes, flown by Alaska Airlines and United in the U.S., will remain grounded until they are inspected, following instructions from Boeing and the FAA.

On Sunday, the FAA recommended airlines also inspect another, older Boeing model — the 737-900ER — that has the same door plug design. 

Since the fuselage blowout, Boeing has said it will implement additional inspections as its planes are built, work alongside teams at Spirit to ensure door plugs are properly installed, and open its factories to additional oversight. It also hired Admiral Kirkland Donald to lead a third-party review of Boeing’s quality management system. 

“We have taken important steps in recent years to strengthen our Quality Management System’s foundation and its layers of protection. But the AS1282 accident and recent customer findings make clear that we are not where we need to be,” Deal wrote in a message to employees last week. 

Alaska and United Airlines both found loose hardware related to the door plug as they began inspecting other planes in their fleets.

A Boeing 737 Max 9 built for United Airlines lands at King County International Airport, Boeing Field after a test flight in Seattle. (Ted S. Warren / The Associated Press, 2020)

On Tuesday morning, United CEO Scott Kirby indicated the airline would consider options other than Boeing for its next airplane order. 

In an interview with CNBC, Kirby said the airline was about five years behind its original order for Boeing’s MAX 10 plane. After the MAX 9 incident, United has begun crafting a new plan that doesn’t include Boeing’s MAX 10, he said.

“I’m disappointed that the manufacturing challenges do keep happening at Boeing. This isn’t new,” Kirby said. “I think the MAX grounding is probably the straw that broke the camel’s back.”

The MAX 10, the largest of the four-model MAX line, and the MAX 7 have yet to receive FAA approval to carry passengers.

Alaska Airlines CEO Ben Minicucci said in an NBC interview Tuesday afternoon he was “more than frustrated. … My demand on Boeing is, what are they going to do to improve their quality programs in-house?” 

Meanwhile, the union representing machinists and aerospace workers at Boeing said Tuesday it had delayed contract negotiations amid the fuselage blowout inspection. Both International Association of Machinists District 751 and Boeing are named as independent parties in the National Transportation Safety Board’s investigation into the incident. 

Contract negotiations were supposed to begin in early February but are now delayed until early March.

 The Los Angeles Times plans to lay off 94 journalists who belong to the newspaper's union, the head of the union said on Tuesday, adding to a string of job cuts that have swept the media industry in recent weeks.

The layoffs represent about a fourth of the union's membership, but are far lower than the number of Guild layoffs initially expected last week, said Matt Pearce, an LA Times reporter who heads the union representing the journalists.

"L.A. Times management has notified me 94 @latguild members are being notified of intended layoff today," he said on the X social media platform on Tuesday.

In a story on the publication's website, also on Tuesday, Meg James reported, opens new tab that LA Times had announced it was cutting at least 115 roles, representing over 20% of its newsroom.

The move adds to the turmoil at the newspaper, whose Managing Editor Sara Yasin resigned on Monday, a little over a week after Executive Editor Kevin Merida left, citing differences with the paper's owner.

The LA Times declined to comment.

The layoffs come amid projections for another year of heavy losses for the newspaper, according to the LA Times report by James, which quoted owner Patrick Soon-Shiong as saying the paper loses $30 million to $40 million annually.

Media companies reliant on advertising dollars have been grappling with an uncertain economy that has squeezed marketing budgets across industries, even as consumers cut back on paid subscriptions. The Washington Post had said in October it planned to offer voluntary separation packages to employees across all functions to reduce headcount by 240. Several technology companies, including Amazon (AMZN.O), opens new tab, and Alphabet's Google (GOOGL.O), opens new tab, also started the year by cutting jobs as they make big investments in generative artificial intelligence.

Southwest Airlines (L, opens new tab flight attendants voted to approve a strike against the carrier, the Transport Workers Union of America Local 556 union said on Tuesday.

Over 98% of the members voted in favor, marking the first time in the union's history that flight attendants authorized a strike against the company.

Southwest flight attendants have been demanding higher pay and a better work-life balance in their new contracts.

Unions across the aerospace, construction, airline, and rail industries have also pushed for higher wages and other benefits in a tight labor market over the past two years.

The announcement comes on the heels of the carrier and its pilots approving a new labor agreement, which will offer about a 50% pay raise over five years.