The company said it is also ending contracts with about 120 contractors worldwide.
Ebay's online payment service unit, PayPal has revealed a plan to lay off 325 jobs as part of company's plan to streamline its business revealed earlier this month.
Jobs that are being eliminated are full time jobs in its product and technology divisions.
The company said that it is also ending contracts with about 120 contractors worldwide and has planned to redesign its product organisation, collapsing nine product groups into one.
The move is part of an effort by the company's new president David Marcus to streamline operations and trim costs as well as focus on product development, technology and marketing.
Ebay anticipates to book a restructuring charge of about $15m in the current quarter, related to the job cuts.
Marcus said while PayPal is strong and performing well, making decisions that impact our employees was hard.
Moving forward, I'm confident these changes will make PayPal even better and stronger," Marcus said.
"Our customers can expect faster innovation and great products and experiences that make their lives simpler."
PayPal is facing increasing competition in the world of online and offline payments services such as Square and Google.
Marcus, wrote in a memo sent out to employees which was obtained by the AP, "If we don't change, we simply won't be able to sustain PayPal's global leadership position over time. And we will not let that happen."
PayPal, which had almost 13,000 employees earlier this year, accounted for 43% of EBay's revenue last year, compared with 25% in 2007.