Online auction giant eBay Inc. has announced that it was cutting 1,000 permanent employees and several hundred temporary workers, about 10 percent of its global workforce.

Online auction giant eBay Inc. announced on Monday it was cutting 1,000 permanent employees and several hundred temporary workers, about 10 percent of its global workforce.

EBay, in a statement released by its San Jose, California, headquarters, also said it was acquiring US online payments business Bill Me Later for 820 million dollars in cash and 125 million dollars in employee options.

EBay, which already owns top online payments service PayPal, also said it was buying Denmark's leading online classifieds site Den Bla Avis (dba.dk) and vehicles site BilBasen (bilbasen.dk) for 390 million dollars in cash.

EBay said the global workforce reduction was intended to simplify and streamline its organization, improve the company's cost structure and strengthen the overall competitiveness of existing businesses.

"While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth," said John Donahoe, eBay's chief executive.

The job cuts are expected to result in pretax restructuring charges of approximately 70 million dollars to 80 million dollars, with the charges predominantly recorded in the fourth quarter of 2008, eBay said.

It said it expected to hit the low end of its third quarter revenue guidance when results for the quarter are released on October 15.

On the Bill Me Later acquisition, Donahoe said eBay is "making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth."

Bill Me Later, founded in 2000, is the number two online payments company after PayPal. EBay said it expects Bill Me Later to generate an estimated 150 million dollars in revenue in 2009.

The purchase of the Danish websites is part of eBay's bid to strengthen its global position in the classifieds market. It now has classified sites in 1,000 cities in 20 countries.

"Classifieds are the preferred e-commerce format in Denmark and represent an attractive and growing market," said Jacob Aqraou, general manager, eBay global classifieds business unit. "With more than 25 years of classifieds success in Denmark, Den Bla Avis and BilBasen are household names with Danish consumers."

Growth has been strong in online classified ads worldwide and eBay's global classifieds business experienced revenue growth of 65 percent in the second quarter over the same period last year.

Besides its online auction side and PayPal, eBay Inc. also owns voice and online text message service Skype, ticket service StubHub and Shopping.com.

The joint announcements sent EBay's share price down by 5.12 percent to 17.97 dollars in early trading on Wall Street on Monday.

© 2008 AFP