Activist investor Ryan Cohen has proposed a massive takeover of eBay Inc. (NASDAQ:EBAY), signaling that severe cost-cutting and layoffs could be on the horizon for the e-commerce giant if his ambitious bid succeeds.
Case Against Overhead
Cohen sharply criticized the company‘s current operating structure during a recent interview with TBPN, explicitly targeting its large workforce and bloated budget.
“They’re spending $5.5 billion on operating expenses on an $11 billion business that has no inventory, and it’s asset light,” Cohen stated. Pointing to the massive employee roster, he added, “There are 11 and a half thousand employees, and it doesn’t make sense. I could run that business from my house.”
Drawing from his experience slashing $800 million in SG&A (Selling, General, and Administrative) expenses at GameStop Corp. (NYSE:GME), Cohen intends to apply the same aggressive restructuring to eBay to pay down acquisition debt and rapidly increase earnings.
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