@valueaddedresource wrote:
@wastingtime101 wrote:
@toomuchstuffagain35 wrote:"scale back contracts with alternate workforces" - does that translate to off shore outsourced CS and IT?
A few months ago eBay removed the callback option from one of the primary help pages, which, in my opinion with no facts to back it up other than the change that took place, could point to them preparing for downsized CS phone service. Downsized even more than the big 2020 changes. 🤷
@wastingtime101 bingo!
eBay's 10-Q filed in July 2023 called out a $12 Million increase in customer support costs for the first half of 2023, compared to the same period in 2022.
While they did not give specifics about what drove that increased cost, I think most anyone who has interacted with eBay customer service in the last year would find it hard to believe a significant portion of it went to hiring more US based, highly trained and knowledgeable human support staff.
Based on what you've called out here with changes to callback availability and many other things I've observed over the last year, I think it's fair to say it was at least in part likely related to implementing more AI-based and/or self-service support tools, possibly in preparation for downsizing phone staff, which could of course result in savings far above that extra $12M expense.
@wastingtime101 I had completely forgotten about this from the Q3 2023 earnings call but thought you'd be interested since it definitely helps back up what you've been noticing.
Both CFO Steve Priest and Jamie called out increasing use of AI as a cost saving measure in the Q&A segment of the call, with Jamie explicitly talking about use in GCX (global customer experience).
Steve Priest: The thing I would say is, we will continue to be very disciplined and get the balance right between growth and profitability. We’ve been making various investments over the last few years, which we will continue to leverage and scale as we get into sort of 2024. We are looking at every area of our cost structure. Obviously, in terms of external spending with suppliers, we’ve been very measured in terms of our approach to the structural cost program this year. With the influx of AI, that will really help us sort of lean in to support the operation next year and use the benefits of that as we go forward.
And we can control our cost structure. I mean, we are operating in a rather dynamic macro environment and so we will lean in as we said, and make sure that our costs grow more slowly than revenue in 2024.
Nikhil Devnani : Just following-up on that operating leverage theme, as you think about prioritizing kind of the highest ROI investments next year, what initiatives are really making that top of that list? And which ones are you maybe more willing to push out a little bit if times get tougher?....
Jamie Iannone: Yeah. So first on the initiatives, we’re still obviously in planning for next year. But I’d say a couple of things. As Steve talked about the cost structure, one of the things we’re looking at is how do we leverage AI and technologies so that our costs don’t grow as our volume grows?
So I’ll give you an example of, one of the areas we’ve been investing a lot in is our customer support. And so if you look at like our GCX expenses, our customer support expenses, we’ve been rolling out conversational help bots over the course of the last few quarters, really advancing what we’re doing there so that we can, focus a lot of our efforts into handling more calls and greater volume with higher customer satisfaction. As an example, we just launched that as a trial in Germany.
We’ve had that live in some of our English markets. An example of some of the initiatives that we’re going to do next year to manage the business and make sure that as Steve said, we’re going after the growth opportunities in the business, while being prudent about our expense structure.
Of course, I would challenge Jamie on the idea that how they have actually deployed this (so far) allows for handling more calls with higher customer satisfaction....but that's a whole other rant. 😂
@masterblasterplanet eBay also filed a WARN notice in Nevada disclosing 28 jobs cut there too.
Still working on getting confirmation, but based on what I'm seeing on Reddit and LinkedIn, it's a good bet at least some of those were at eBay's authentication facility in Vegas.
@downunder-61 wrote:Perhaps if eBay continued at what they were (once) good at - providing a global selling platform, rather than trying to manage/control/become 'shippers' 'authenticators' and 'bankers' among other things, they may have been able to keep their eye's on the failing platform.
Thumbs in way too many pies when you only excel in one area will inevitably lead to something breaking.......OOOPS
@downunder-61 it's honestly been surprising to me that apparently none of the major media outlets covering this have any idea about all those other things you mentioned - they seem to think eBay is still mostly "just a venue" providing tech/software that connects buyers and sellers and that's it.
eBay International Shipping is still being run through a third party partner, so while there are certainly significant costs involved, eBay is not doing most of that heavy lifting themselves.
But the authentication programs for sneakers, streetwear and handbags *are* in-house operations. eBay acquired Sneaker Con's authentication business in 2021 for an undisclosed sum which included physical warehouse/authentication facilities and employees in Las Vegas and New York plus UK, Canada, Australia and Germany. They've since added another location in New Jersey as well.
Then they also acquired TCGPlayer in 2022 for $295M, which had ~600 employees at the time, as well as a large facility in New York where they handle tens of thousands of trading cards daily.
eBay doesn't disclose exact headcount for these operations but I don't think it would be out of the realm of possibility to suggest they may have (or at least at one time had) 1,000+ hourly warehouse/authentication workers on the payroll globally.
They also increased investment in this area in 2023, with financial reports showing $38 Million additional expense related to authentication expansion (compared to 2022) just in the first 3 quarters alone.
Looking at acquisition costs, facility costs, wages etc., plus legal and other costs of their ongoing labor relations issues with now unionized workers at TCGPlayer, it's clear that Jamie has sunk hundreds of millions of dollars into this strategy over the last few years (not to mention the marketing spend to promote these categories) and based on his comments in the memo about the layoffs, he is steadfastly committed to continuing down this path.
As I mentioned earlier in this thread, that's obviously nowhere near the size/scope of Amazon's fulfillment operations, but it is a very significant change in eBay's strategy away from its previous asset-light business model....and it absolutely boggles my mind that almost nobody is talking about the implications of that or what role it may have played in eBay finding itself in the precarious position of "headcount and expenses outpacing growth."
