Groupon cuts more than 500 employees and plans to focus "only on critical activities" from now on
Chicago-based Groupon today laid off more than 500 of its employees, or 15% of its 3,416 employees, according to social media posts by former employees. The reduction impacted employees across teams including Merchant Development, Sales, Recruiting, Engineering, Product and Marketing.
Groupon confirmed the layoffs to TechCrunch after the story was published.
“Our overall business performance is not at the levels we anticipated and we are taking decisive steps to improve our trajectory,” CEO Kedar Deshpande said in a statement provided to TechCrunch. The chief executive says the layoffs, along with reinvestment in marketing and initiatives that drive customer buying frequency, will position the company to be cash flow positive by the end of 2022. /p>
In a letter to staff, Deshpande said Groupon is reducing its North American sales teams to focus on "self-service merchant acquisition capabilities." It is also reorganizing the business to focus "only on critical activities and rely on more external support". "In addition, we propose to reduce cloud infrastructure and support functions as we complete cloud migrations." Groupon is also closing its Australia Goods business, more than a decade after it launched. Finally, Groupon said it will "streamline" its real estate footprint to be more in line with hybrid working.
Groupon, which finds coupons, has faced stiff competition in e-commerce since its inception in 2011. Rakuten and Honey, which sit on consumers' browsers to scour the Internet to display related offers , have become massive enterprises. All platforms make money through affiliate fees and revenue-sharing partnerships, which means the more competitors, the bigger the fight for customer acquisition. A Groupon spokesperson said he doesn't see Rakuten and Honey as competitors because the companies focus more on physical products, while Groupon focuses on experiences and services.
Nevertheless, favorable e-commerce trends have changed as consumer spending shifts in response to the market downturn. It's hard to be a growth-stage startup.
Over the past few years, the number of Groupon buyers has dropped sharply. According to Statista, 22.2 million visitors to the company's site purchased at least one offer in Q1 2022, up from nearly 54 million in Q4 2014.
The layoffs, while significant, are not as significant as the workforce reductions made by Groupon in 2020. In April of that year, Groupon announced that it would lay off or lay off 2,800 employees as the business was "deteriorating" due to the COVID-19 pandemic. Following the restructuring, Groupon phased out its merchandise category by moving to a third-party marketplace model, in which merchants take responsibility for fulfillment and returns.
According to its jobs page, Groupon has 67 vacancies in account management, engineering, software development, and more. The company is trading at $13.89 at press time, down 67% from its 52-week high of $41.66.
It's probably no coincidence that the layoffs came before Groupon released its second quarter 2022 financial results this afternoon. Revenue was $153.2 million in the second quarter of 2022, down 42% from a year earlier, with just 21.1 million customers making one or more purchases during of the last 12 months. The company blamed the transition of its merchandise business to a marketplace model as well as a "decline in engagement" on the platform.
Below is the full memo Groupon says Deshpande sent to staff this morning:
Team,
I am writing to bring you some bad news. Later today, we will publicly announce a plan to streamline our cost structure, which will include our proposal to cut approximately 500 positions globally. While we've discussed the need to streamline our organization as part of our strategy to transform Groupon into a destination for local experiences and services, I recognize that saying goodbye to our colleagues will hit us all harder than anyone. what word on a piece of paper.
We have conducted a thorough analysis of our organization and business structure, and the actions we are announcing today were not taken lightly. The impact will be felt primarily in our technology organization, North American sales and our Australian merchandise business.
...
Chicago-based Groupon today laid off more than 500 of its employees, or 15% of its 3,416 employees, according to social media posts by former employees. The reduction impacted employees across teams including Merchant Development, Sales, Recruiting, Engineering, Product and Marketing.
Groupon confirmed the layoffs to TechCrunch after the story was published.
“Our overall business performance is not at the levels we anticipated and we are taking decisive steps to improve our trajectory,” CEO Kedar Deshpande said in a statement provided to TechCrunch. The chief executive says the layoffs, along with reinvestment in marketing and initiatives that drive customer buying frequency, will position the company to be cash flow positive by the end of 2022. /p>
In a letter to staff, Deshpande said Groupon is reducing its North American sales teams to focus on "self-service merchant acquisition capabilities." It is also reorganizing the business to focus "only on critical activities and rely on more external support". "In addition, we propose to reduce cloud infrastructure and support functions as we complete cloud migrations." Groupon is also closing its Australia Goods business, more than a decade after it launched. Finally, Groupon said it will "streamline" its real estate footprint to be more in line with hybrid working.
Groupon, which finds coupons, has faced stiff competition in e-commerce since its inception in 2011. Rakuten and Honey, which sit on consumers' browsers to scour the Internet to display related offers , have become massive enterprises. All platforms make money through affiliate fees and revenue-sharing partnerships, which means the more competitors, the bigger the fight for customer acquisition. A Groupon spokesperson said he doesn't see Rakuten and Honey as competitors because the companies focus more on physical products, while Groupon focuses on experiences and services.
Nevertheless, favorable e-commerce trends have changed as consumer spending shifts in response to the market downturn. It's hard to be a growth-stage startup.
Over the past few years, the number of Groupon buyers has dropped sharply. According to Statista, 22.2 million visitors to the company's site purchased at least one offer in Q1 2022, up from nearly 54 million in Q4 2014.
The layoffs, while significant, are not as significant as the workforce reductions made by Groupon in 2020. In April of that year, Groupon announced that it would lay off or lay off 2,800 employees as the business was "deteriorating" due to the COVID-19 pandemic. Following the restructuring, Groupon phased out its merchandise category by moving to a third-party marketplace model, in which merchants take responsibility for fulfillment and returns.
According to its jobs page, Groupon has 67 vacancies in account management, engineering, software development, and more. The company is trading at $13.89 at press time, down 67% from its 52-week high of $41.66.
It's probably no coincidence that the layoffs came before Groupon released its second quarter 2022 financial results this afternoon. Revenue was $153.2 million in the second quarter of 2022, down 42% from a year earlier, with just 21.1 million customers making one or more purchases during of the last 12 months. The company blamed the transition of its merchandise business to a marketplace model as well as a "decline in engagement" on the platform.
Below is the full memo Groupon says Deshpande sent to staff this morning:
Team,
I am writing to bring you some bad news. Later today, we will publicly announce a plan to streamline our cost structure, which will include our proposal to cut approximately 500 positions globally. While we've discussed the need to streamline our organization as part of our strategy to transform Groupon into a destination for local experiences and services, I recognize that saying goodbye to our colleagues will hit us all harder than anyone. what word on a piece of paper.
We have conducted a thorough analysis of our organization and business structure, and the actions we are announcing today were not taken lightly. The impact will be felt primarily in our technology organization, North American sales and our Australian merchandise business.
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