The popular online retailer EBay Inc. announced yesterday its plans to cut ten percent of its global workforce in order to ensure the successful continuity of its business. The reduction, which is the largest in the company’s 13-year history, will save about $150 million in annual operating costs. The ten percent equals 1,000 full-time employees and about 600 temporary workers.

Even with this announcement, EBay’s shares reached the lowest point in the past five years, falling 12 percent but managed to partially recover and closed at $17.89, down with only 5.5 percent.

The company took a similar measure in March, but on a much smaller scale. At the time, 125 positions were cut in Europe and North America.

Chief Executive John Donahoe explained that even though the company’s sales are affected by the weakening economy, the layoffs are not related to this issue as they are largely prompted by internal problems. He added that the staff reduction will "make us a nimbler, more efficient organization." He also stated that the details of the bad news will soon be sent to EBay’s employees around the world. “We are treating the affected people with the kinds of values you would expect out of eBay,” he said.

The lay-offs are expected to cost between $70 million to $80 million, amount which will be recorded in the fourth quarter, as the results of the third quarter will be reported on October 15.

The news does not stop here, as EBay is planning a $1.35 billion acquisition move for the Web payment firm Bill Me Later and also the Danish classified advertising companies Den Bla Avis and BilBasen. Bill Me Later will be bought for $920 million in cash and options. The company is known for introducing a new approach to online payments, as it allows Internet users to buy certain items and issues a bill over the next 30 days, offering the possibilities of paying directly or taking out a loan. Its system is developed to perform a rapid electronic background check, using the user’s date of birth and Social Security number, in order to determine whether the buyers are capable of paying the bills on time.

Mr. Donahoe admitted that considering the global environment, this might not appear as the best time to commence these types of major acquisitions. Still, he added that they are fortunate enough to have a strong cash reserve of almost $4 billion which puts them in the position of successfully completing such a move. "In times like this, stronger companies get stronger, and that's exactly what these acquisitions will help us do," Donahoe said. He also talked about the company’s activity, as EBay plans to help consumers "get through this time and holiday season by offering the lowest prices" and also "help entrepreneurs (to set up businesses on eBay) ..."

EBay is not the only company to consider such lay-off plans. Hewlett-Packard and Nvidia both recently announced their intentions to cut the personnel and Yahoo is also conducting a review process of the entire organization in order to make it more functional.