eBay, also known as a tech company with a seemingly continuous turnover of top management chasing short-term profits and finding new ways to take money from sellers and affiliates, has seen it come to a head in January 2024. Some highlights ….
Criminal Prosecution
eBay had maliciously targeted, threatened and terrorized individuals who were critical of the company. The reprehensible conduct went to the top of the company.
Now, a 6 count criminal complaint has been filed against eBay in Massachusetts. In return for a three-year non-prosecution agreement, eBay will pay a $3 million dollar fine for its criminal behavior.
But the three million dollars was just the tip of eBay’s penalties for wrongdoing.
$59 Million DOJ Fine for Facilitating Dangerous Counterfeit Pill Trafficking
The United States Department of Justice took action against eBay for allegedly violating the Controlled Substances Act by facilitating the sale of pill press machines used to manufacture counterfeit prescription medications.
eBay’s failure to comply with “basic” requirements allowed people to setup pill factories and traffic in counterfeit pills, sometimes laced with dangerous Fentanyl.
To resolve the DOJ claims of violations eBay is paying a whopping $59 million dollar penalty.
Get this … that’s just for starters.
The DOJ is also suing eBay for selling devices used to defeat vehicle emissions controls, and also for selling mislabeled pesticide products. Expect more fines in the future.
Frankly, anyone looking at eBay’s product listings knows that’s just the tip of the iceberg for illegal activity eBay allows. For intellectual property owners eBay is a cesspool of IP theft that eBay profits from.
1000 Employees Terminated – 9% of eBay’s Workforce
eBay then announced the firing of 1000 employees (9 percent of its workforce) and cancelling third party contracts with its “alternate” workforce.
What is an “alternate” workforce? I don’t know, but it sounds like fraudulently claiming employees are independent contractors via employment agencies. I could be wrong until more information is known, but the 1000 terminations in the news is seemingly a low figure not accounting for how many people and their families are having their finances impacted.
eBay’s most recent CEO blamed “our overall headcount and expenses have outpaced the growth of our business.”
Hmmm. Let’s look at the “expenses”.
$62 million in fines, with more likely to come, divided by 1000 employees is $62,000 per employee.
It isn’t stated how much each fired employee was being paid on average, or the value of their benefits. Probably more than $62,000 assuming they are in the Bay Area … although eBay questionably claims it is a Utah company when it comes to resolving disputes. This, IMHO, is part of the problem – shady practices. eBay may have some employees in Utah but it is headquartered in California and really, no one considers it anything but a California company albeit with some units located elsewhere.
Notably, I have not seen an announcement about eBay decreasing or halting the dividend paid to shareholders. It appears employees are bearing the brunt of improper management, while management continues to reap stock options and investors get paid. In fact, the dividend rate has been increasing giving investors more and more of eBay’s income even though the CEO claims layoffs are needed because expenses are too high.
Zacks says eBay is paying about 31% of its earnings in dividends, or $519 million per year if I read this right – https://www.zacks.com/stock/research/EBAY/dividend-history
Looks like it turns out employee expenses are too high, but not stock payments?!
And that, IMHO, is another part of the problem at eBay. There is nothing I have seen about the big-wigs taking a hit and responsibility for their mismanagement. Just the little guys while the stock payments continue to roll and millions are paid in fines.
Predictions:
– eBay will continue to pay substantial fines.
– Automation and AI result in even more employee layoffs.
– Payments for management and stockholders will continue and even increase.
Let the good times roll!
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