The job cuts will be made across its global enterprise, marketplace and PayPal business - a loss of around seven per cent of staff - and is expected to save $300m (£198m) a year.
Ebay will also spin off its enterprise arm which works with other companies to get them selling on the site, either taking it public as a separate company or selling it off.
Activist shareholder Carl Icahn, eBay’s largest shareholder who has pushed for the company to split, has succeeded in getting the firm to adopt a number of corporate governance changes including the addition of business partner Jonathan Christodoro to the board.
Christodoro will move to the board of PayPal after it becomes a separate company. Ebay revealed plans to spin-off the payments business last year.
“We believe the actions of eBay’s board and management in crafting this agreement with us have marked a large step forward for corporate governance,” Icahn said in a statement. “The company reached out to us recently to discuss value enhancement generally, and our constructive conversations led to the mutual development of a governance structure going forward that we believe will better align the interests of shareholders, directors, management and other stakeholders.”
Under the new agreement, PayPal will have limited ability to prevent a takeover after its split, making the company an attractive proposition for bidders.
Of the three - PayPal, enterprise and marketplace - PayPal and enterprise are the better performing. Analysts believe the three will be worth more as separate businesses than combined.