Barrons cites a Wedge Partners report that "the company's business is "deteriorating" and that the company is readying layoffs that could affect 10% of the company's 15,000 employees."
If there are layoffs, it will be interesting to compare the severance packages of "regular employees" and managers with those of eBay's top executives.
Like many corporate boards, eBay's Board of Directors put into place Golden Parachutes for its top executives. It appears from SEC filings that some top execs will receive two years' target cash compensation, defined as annual base salary plus target annual incentive bonus. That "bonus" is usually 100% of salary, so it would be like getting 4 years' worth of pay if they are laid off. (President and CEO John Donahoe's target bonus is 125% of salary.)
providing a cash payment equal to two years' target cash compensation (defined as annual base salary plus target annual incentive bonus) if the termination occurs within two years of the date of the severance agreement, one and one-half years' target cash compensation if the termination occurs more than two but within three years of the date of the severance agreement, and one year's target cash compensation if the termination occurs more than three years after the date of the severance agreement.
Meg Whitman and her inner circle of top executives are gone. I use that term loosely, since some, including Bill Cobb and Whitman herself, are on the payroll through the end of the year; Whitman gets office space and IT and secretarial support for 3 more years and will stay on the Board at least until June 2010. Rajiv Dutta, who retired recently, is working with his replacement Lorrie Norrington on the transition until October 2008 and will subsequently act as a consultant through the end of the year.
With layoffs reportedly looming, it now seems quite significant that Bob Kagle, the Benchmark venture capitalist who has been on the Board from the beginning, chose to step down from the Board in June.
The cynic might say Whitman would prefer any large-scale layoffs to come after election day - she and Carly Fiorina are economic advisors to Republican candidate John McCain, and bad news at eBay would not reflect well on the campaign. But layoffs in the prime holiday shopping month of November would not be good for eBay business.
I have no inside information about the likelihood of layoffs. The management of eBay has been a bit of a mystery for the last year or so. But if they are coming, I'm eager to see exactly where the cuts occur.
Update 9/15/08:
eBay's public relations department did not respond to an email inquiry sent today about the report of layoffs at the firm. I got Wedge Partner's Ryan Hunter on the phone this afternoon, but he told me he had no comment about the report he co-wrote with Brian Blair, nor would he agree to send me a copy of the report. In an overlapping note of interest, Alan Lewis, Creator and Product Manager for eBay Desktop, blogged today that he is leaving eBay. He wrote that the decision to leave was personal and "had nothing to do with anything else that is going on at eBay right now," linking to the Barron's article about the layoffs.
I interviewed Alan twice for the AuctionBytes podcast series. He'd been at eBay since 2004 and said in his farewell post that the people who work at eBay are basically good. He also wrote, "I made it known before leaving that I strongly believe that the future for auctions growth at eBay is in eBay Desktop, and I hope that message got through."
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Possible Layoffs at eBay, Golden Parachutes for Execs
