A problem has arisen recently with eBay, which has signed an agreement with TOM Online on 20 December 2006 for a joint venture agreement in China. According to the agreement, the 2 companies will combine expertise and a joint investment to build a new China marketplace mainly for mobile operations and electronic commerce. The new venture will include the take-over of the eBay’s operation in China (known as Eachnet), in which the eBay’s China ecommerce operation will shift to focus on international business.
eBay China’s employees, however, are showing strong resistance against the move and are complaining about the scheme. Under this new scheme, eBay employees are first to have their current labor contracts ceased before they are to sign new contracts with the new joint venture with TOM Online.
Employees are mostly concerned with having to sign new contracts, they will not be able to keep their current benefits and salaries. On top of that, there is a good possibility that they may lose their stock options with eBay. Many employees are worrying that they will not be employed by the new venture for at least 1 year, as nothing related is clearly stated in their new contracts.
About 100 eBay China employees have signed a petition reflecting that they will not sign the new agreement. However, a spokesman from eBay China insisted that the company has no intentions to cut staff.