Duringon Wednesday afternoon, eBay executives tried to do some damage control in response to reports last week that there soon.
However, while the eBay executives asserted PayPal's strengths and innovations around mobile payments, they didn't exactly deny that the cuts are coming.
CEO John Donahoe responded first:
Yes, so PayPal -- first of all, let's be clear. PayPal is a very strong franchise, strong business, strong opportunity. While that's true, we are absolutely committed to accelerating the pace of innovation at PayPal. And since David has taken over, he is taking what is in essence nine different product organizations across PayPal and streamlining and consolidating them into one global product organization. And PayPal employees know about that.
We haven't finally landed on the impact of that. And once we do, we will communicate that to the employees and elsewhere. But I think the two things I would say is, one, this is clearly not a case where we are trying to pursue any cost reduction or efficiency goals.
eBay's chief financial officer Bob Swan followed up:
John, I think the only thing I might add, Heath, is that we are working through things at this end, and I would say we haven't announced anything yet externally. And when we get along to where we have something to announce, as usual, we, in fact, will.
It's probably worth just highlighting that, I think as you are aware, historically when we have situations like this that we would characterize as one-time in nature that have an impact on the financials, our historical practice has been, if it's material -- and I would use material as roughly $10 million as a threshold -- if it's above that, we usually put it in GAAP-only numbers. And if it's below that, we just absorb that in our non-GAAP results.
I just tell you that just so you understand how we think about items that are one-time in nature over time, so you have context.
For reference, Bloomberg reported on Friday that there could be up to 400 layoffs at the payments processing company, primarily hitting the product and technology units. That equates to roughly 3 percent of PayPal's workforce.