EBay Lets PayPal Go and Rethinks Strategy
In case you didn’t know, eBay and Amazon have been dropping business units, reorganizing and finding new leaders as a result of market pressures that are forcing them to rethink their strategies. EBay decided to let its PayPal unit go and has since been trying to figure out who will occupy desk chairs at its board of director meetings. The plan is for 15 members to guide the company, 13 of them being independent.
Carl Icahn is eBay’s largest shareholder. He’s an investor with a reputation for breathing new life into struggling companies. He’s had his hand in the comebacks (or “big breaks”) of the likes of Netflix, Blockbuster, Lionsgate and Herbalife. As someone who has some clout in eBay’s board room, he convinced the company to introduce his partner, Jonathan Christodoro, to the group. Mr. Christodoro has served as the managing director of ICahn Capital since 2012.
GoPro president Tony Bates and American Red Cross CEO Gail McGovern will join the board with Christodoro. Chief Executive John Donahoe will step down after eBay and PayPal are competent as separate entities. Directors William C. Ford and Richard T. Schlosberg plan to step down in May.
What does this mean for the e-commerce retailers out there? Well, eBay has stated that its plans are to cut 2,400 jobs and consider selling or spinning off its eBay Enterprise unit, which helps companies sell online. That should make the business units, each of which may be a new corporation soon, nimbler. That’s what they intend, anyway. Whether you’re happy with that plan probably depends on your experience with eBay, PayPal and eBay Enterprise. As I’ve said before, don’t expect things to remain constant very long in this industry.