eBay is cutting jobs during hard economic times

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The 1,000 jobs cut by eBay Monday begged the question, who's next? Beleaguered Yahoo!, which spent six months fending off a takeover bid from Microsoft, is said to be mulling a few thousand layoffs. Tech observers say cuts from other Valley giants wouldn't be surprising either.

Kevin Freedman, chief financial officer of Slide, a Web applications developer in San Francisco, says eBay's job cuts are "potentially telling from a big company perspective." Freedman, a former director of finance at San Jose, Calif.-based eBay, notes that big Valley companies likely will "limit hiring and potentially ' do what eBay did."

The witch's brew of internal problems, the weakening economy and the banking crisis could produce a swell of bad news from Valley companies over the next few weeks as they report earnings.

As the banking crisis has darkened over the past few weeks, tech companies have begun issuing warnings that their third-quarter results will contain little to boast about. Microsoft's Steve Ballmer admitted that the software giant isn't immune to the economy's slowdown. On Monday, movie rental company Netflix said the number of subscribers in the third and fourth quarters will be lower than it had previously forecast. The Los Gatos, Calif.-based company will report third-quarter earnings on Oct. 20.

"We'll probably see lower revenues, which works its way through the system in the form of lower stock prices, lower head count," says Hank Barry, a director at Howard, Rice, Nemerovski, Canady, Falk & Rabkin.



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