eBay Layoff 2026: What Employees Need to Do This Week

A layoff notice from eBay starts five time-sensitive clocks that most employees don't know about. eBay announced on October 21, 2026 that it's eliminating approximately 1,800 positions, 9% of its global workforce, in its second round of cuts this year. The company cited ongoing restructuring as it works to stay competitive in a crowded e-commerce market. If your role is affected, the decisions you make in the next few days and weeks have real financial consequences. Here's what to do, in order.

What happened

eBay confirmed the cuts on October 21, 2026. This is the company's second workforce reduction in 2026, affecting roles across multiple departments. Severance terms have not been publicly disclosed. If you haven't received your official separation paperwork yet, it's coming, and the clocks below start running from your last day worked or the date you receive your COBRA notice, whichever is later for the health insurance decision.

File for unemployment today

Unemployment insurance is money the state sets aside for exactly this situation. In California, you file through the Employment Development Department at edd.ca.gov. The process takes about 30 minutes online.

The most important thing to know: California does not backdate your claim. If you wait a week to file, you lose a week of benefits. File today, even if you're planning to take a few days to process what happened.

California's maximum weekly unemployment benefit is $450 as of 2026.¹ Your actual benefit will be based on your highest-earning quarter in the base period, so the $450 figure is the ceiling, not what everyone gets. California also has an ID verification step, so have your driver's license, Social Security number, and employment history ready when you file.

One note on severance: California treats severance as wages in some cases, which can affect your benefit calculation. Don't delay filing while you figure this out. File now and the EDD will sort the calculation. Waiting costs you money.

You can also download our free checklist to track every step of the filing process in one place.

What should you do about your severance agreement?

A severance agreement is a legal contract. In exchange for severance pay, you're typically releasing eBay from certain legal claims. That release is real and it's permanent once you sign, so read every word before you put your name on it.

If you're 40 or older, the Older Workers Benefit Protection Act gives you specific rights. Because this is a group layoff affecting more than one employee, you have 45 days to review the agreement before you're required to sign.² After you sign, you have 7 days to change your mind and revoke it, no questions asked.² eBay cannot legally shorten these windows, and no one can pressure you to sign before day 45.

If you're under 40, your review window depends on what's written in the agreement. Read it carefully regardless of your age.

Things worth looking at before you sign: whether the release covers future claims (not just past ones), whether the agreement restricts where you can work next, whether the severance is paid in a lump sum or installments, and what happens to your benefits during the severance period. If anything looks unusual, it's worth an hour with an employment attorney before you sign. The 45-day window exists for exactly this reason.

What should you do about health insurance?

You have two options when you lose eBay's coverage, and you have 60 days from the qualifying event to choose.

COBRA lets you keep your current eBay health plan. The catch is cost. When you're employed, eBay pays most of your premium. On COBRA, you pay the full premium yourself, plus a 2% administrative fee. The average COBRA premium for individual coverage in 2026 is $703 per month.³ For a family plan, that number is significantly higher.

COBRA does have one genuinely useful feature: you can elect it retroactively. That means if you have a medical expense in month two and haven't chosen yet, you can elect COBRA, pay the back premiums, and have coverage apply. Don't cut it too close, but that retroactive option gives you flexibility if you're healthy right now and want time to compare.

The ACA Marketplace is your other option. Losing employer coverage triggers a Special Enrollment Period, which gives you 60 days to enroll in a Marketplace plan even outside the annual open enrollment window.⁴ Marketplace plans are often cheaper than COBRA, especially if your income this year is lower than usual. Visit healthcare.gov to compare plans for your situation.

Don't let both 60-day windows expire without making a decision. If you miss them, you may end up uninsured until the next open enrollment period.

What about your equity and stock options?

eBay is a publicly traded company. If you received stock options as part of your compensation, your termination date starts a clock you need to know about.

Incentive Stock Options (ISOs): You have 90 days from your termination date to exercise ISOs and keep their favorable tax treatment under IRC Section 422.⁵ After 90 days, any unexercised ISOs convert to non-qualified stock options (NQSOs). NQSOs are taxed as ordinary income at exercise, not at the more favorable long-term capital gains rate. That's a meaningful difference depending on how much spread exists in your options.

There's also an AMT consideration with ISOs. Exercising ISOs doesn't trigger regular income tax, but the spread between the exercise price and fair market value does count as income for Alternative Minimum Tax purposes. If eBay's stock price is well above your strike price, talk to a CPA before you exercise. The 90-day window gives you time to do that math, but don't let it slip.

RSUs: Unvested restricted stock units typically forfeit on your last day. Check your grant agreement for the exact language, but in most cases, unvested RSUs don't survive termination. Any RSUs that vested before your last day are yours; you'll receive those shares or their cash equivalent per your grant terms.

What happens to taxes on your severance?

Severance pay is taxed as ordinary income. The federal government treats it as supplemental wages, which means eBay will withhold at the flat federal supplemental rate of 22% regardless of your actual tax bracket.⁶

If your marginal tax rate is higher than 22%, that 22% withholding may not be enough. You could owe additional federal tax when you file your return in April. To avoid a surprise bill, you can make estimated tax payments to the IRS during the year.

The Q2 2026 estimated payment was due June 15, 2026.⁷ The Q3 2026 estimated payment is due September 15, 2026.⁷ If you receive a large severance payment in Q4, the Q4 payment is due January 15, 2027. A CPA can run the numbers and tell you exactly what to set aside.

California also taxes severance as ordinary income at the state level. The EDD's withholding on severance may not fully cover your California tax liability either, so factor that in when you're deciding how much to set aside.

What should you do with your 401(k)?

Your 401(k) balance doesn't disappear when you leave eBay. You have several options, and none of them require an immediate decision. But there's one deadline worth knowing.

Your main choices are: leave the money in eBay's plan (allowed in most cases if your balance is above a minimum threshold), roll it to an IRA, or roll it to your next employer's plan when you have one.

If eBay sends you a check directly, that's an indirect rollover. You have 60 days from the distribution date to deposit it into an eligible retirement account.⁸ If you miss that deadline, the IRS treats the distribution as taxable income and you'll owe taxes plus a 10% early withdrawal penalty if you're under 59.5. eBay is also required to withhold 20% of the distribution for taxes upfront, so you'd need to make up that 20% out of pocket to roll the full amount.

The simpler move is a direct rollover. You instruct eBay's plan administrator to transfer the funds directly to your IRA custodian. No check, no 60-day clock, no mandatory withholding. Call your plan administrator and ask for direct rollover paperwork.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Layoff Guide

The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.

Get the Layoff Guide, $39 or build your free Decision Calendar.

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Sources

1. California Employment Development Department, "Calculating Benefit Payment Amounts," edd.ca.gov (2026).
2. U.S. Equal Employment Opportunity Commission, Age Discrimination in Employment Act, OWBPA provisions, eeoc.gov.
3. KFF, "Health Policy 101: Employer-Sponsored Health Insurance," kff.org (2026). Average individual COBRA premium including 2% administrative fee.
4. U.S. Department of Health and Human Services, "Special Enrollment Period," healthcare.gov.
5. Internal Revenue Service, IRC Section 422; Publication 525, irs.gov. ISO 90-day post-termination exercise window.
6. Internal Revenue Service, Publication 15 (Circular E), supplemental wage withholding, irs.gov. 22% flat rate on first $1 million of supplemental wages.
7. Internal Revenue Service, "When to Pay Estimated Tax," irs.gov. Q3 2026 due date: September 15, 2026.
8. Internal Revenue Service, "Rollover Chart," irs.gov. 60-day indirect rollover rule.
9. U.S. Department of Labor, COBRA information, dol.gov. 60-day COBRA election window.