eBay Cut 9% of Its Staff and, This Time, Didn't Bother Blaming AI

On October 20, eBay CEO Jamie Iannone sent employees a memo announcing the company's second major layoff of 2026: roughly 9% of its global workforce, cutting most deeply into the same technical ranks — software engineering, product management, design, and data science — that bore the brunt of a 6% reduction in February. A WARN notice filed for eBay's San Jose headquarters shows 229 positions eliminated there alone, including 26 director-level and 48 manager-level roles. An October 22 SEC filing put the pre-tax restructuring cost at $130 million to $150 million, mostly severance, with the bulk of the charge landing in the fourth quarter and the reductions expected to be substantially complete by the end of March 2027.

The missing word

What's conspicuous is what the October memo doesn't say. In February, when eBay cut about 800 jobs — roughly 6% of its workforce at the time — the company was explicit: it wanted to "focus more on artificial intelligence" and reinvest in the technology as a strategic priority. This time, per the memo reviewed by Reuters, Iannone told staff only that "our strategy is working" and that "continuing to capture the significant opportunity ahead requires us to make thoughtful choices about where we focus and invest," pointing to authenticated luxury, collectibles, and refurbished goods as growth areas. AI isn't mentioned once. Yet the job functions being eliminated — the engineers, product managers, and data scientists who build and run eBay's platform — are precisely the roles companies elsewhere are citing AI tooling to shrink. eBay didn't need to invoke AI this time to produce a layoff that looks, on paper, like exactly the kind of AI-era headcount trim other firms are now naming explicitly.

That's not necessarily spin fatigue — eBay has previously named AI as one of several growth levers alongside categories like collectibles and refurbished goods, it simply didn't tie it to this particular round of cuts. Whether that's because AI's role in the October decision was smaller than in February's, or because eBay has simply learned that announcing AI-driven layoffs invites unflattering coverage, is something the company isn't saying. A spokesperson confirmed the cuts to Reuters but didn't elaborate on the reasoning beyond the memo's language.

Cutting into growth, not decline

The financial backdrop makes the timing harder to read as simple distress. eBay's shares are up nearly 40% this year, more than triple the S&P 500's roughly 12% gain over the same period. The company closed a $1.4 billion acquisition of resale platform Depop this year to widen its reach with younger shoppers, and its second-quarter 2026 gross merchandise volume hit $22.4 billion on $3.1 billion in revenue, both up 15% year over year. Earnings are due October 28 — just one week after the layoff announcement — which will be the first real test of whether investors read the cuts as a disciplined reallocation toward luxury and collectibles or as a hedge against softening core marketplace volume that the glossy growth numbers aren't fully showing yet.

eBay also isn't operating free of outside pressure on its cost structure. In May, GameStop CEO Ryan Cohen made a $56 billion unsolicited bid to acquire eBay outright, which eBay's board rejected as "neither credible nor attractive." Cohen responded by threatening a hostile takeover and has kept up public criticism of eBay's staffing and operating efficiency since. eBay has not said whether that pressure campaign factored into either round of 2026 cuts, but the optics are hard to ignore: an activist investor publicly agitating for leaner headcount, followed within months by two separate rounds of cuts targeting exactly the departments — engineering, product, data science — that determine how expensive a company is to run relative to its revenue.

There's also a geographic wrinkle. A Chinese outlet reported that cuts in China could reach as high as 80% of local operations, including at its China R&D center; eBay called that figure speculation and denied plans to close the center or exit the Chinese market, though it hasn't offered a competing number. Combined with the San Jose WARN filing's granular breakdown — more director- and manager-level cuts than a typical rank-and-file reduction would produce — the shape of these layoffs looks less like trimming support staff and more like flattening a management layer eBay built up during a period of heavier technical hiring.

Why it matters

eBay's pattern — cite AI explicitly when cutting jobs once, then quietly cut deeper into the same functions eight months later without mentioning it — is a useful data point for anyone trying to measure how much of 2026's layoff wave is actually AI-driven versus how much AI has simply become a convenient, then inconvenient, label companies attach to ordinary cost-cutting. eBay's October 28 earnings call will show whether Wall Street buys the reallocation story. What it won't necessarily show is whether the engineering and data-science jobs eliminated this month get replaced by new hires, by AI tooling, or by nothing at all — and eBay, notably, isn't volunteering an answer to that question anymore.