Groupon orders more layoffs as it reorganizes

The online deals provider says it is cutting 500 people, adding to the 500 it laid off last year.

SHARE Groupon orders more layoffs as it reorganizes
Groupon headquarters building, 600 W. Chicago Avenue, Friday, August 31, 2012.

Groupon plans to lay off 500 people by July on top of the 500 employees let go last year.

Sun-Times file

Chicago-based Groupon, the shrinking provider of online deals for local and national merchants, is laying off 500 people to deal with financial losses and plummeting revenue.

The new cutbacks, disclosed in a securities filing, come less than six months after Groupon announced separate plans to cut staff by about 500 workers. Its last reported employee headcount was 3,077 at the end of the third quarter last year, about 800 fewer people than it had 12 months earlier.

Spokesman Nicholas Halliwell declined to say which locations or types of jobs would be most affected. The company has offices and data centers around the world. Its Chicago headquarters is at 600 W. Chicago Ave., but it has offered a large portion of it for sublease in a market that has seen many companies reduce office requirements.

In its filing, Groupon said the new layoffs should be completed by July and save about $70 million annually. It said the cutbacks will cost $10 million and $20 million for severance and other compensation, adding to $9.6 million incurred for last year’s layoffs.

Groupon also reported that additional cost cuts for technology, software and professional services will save $30 million a year.

In its most recent earnings report, Groupon registered a loss of $180.1 million for the first nine months of 2022, compared with a profit for the same period in 2021. Its revenue fell nearly 40% to $450.9 million.

At the time, Groupon CEO Kedar Deshpande said the company was making progress on a turnaround strategy that included cost cuts and enhancing customer experience.

“I believe that if we get these two strategic priorities right, we can do a substantively better job meeting our customers’ needs every time they come to our marketplace and driving them to buy local experiences and services from the Groupon marketplace more frequently,” he said. “Improving local purchase frequency is the most important measure of how well we are executing our strategy, and we are going to be relentless in driving this metric higher.”

Pandemic shutdowns of small merchants hurt Groupon’s business as has growing competition for online sales.

Groupon is a publicly traded company and its shares have lost more than 70% of their value in the past 12 months.

The Latest
In all, 129,000 children, 68% of those 5 or younger, had lead in their home drinking water, a study found.
It’s one to flush for the right-hander acquired from the Padres in the Dylan Cease trade.
Un cuestionario para candidatos para ayudarle a considerar sus opciones en las elecciones primarias de Illinois del 19 de marzo de 2024.
“I don’t talk about all the hard work and dedication it takes to take care of my son and the effort and the hard work that his siblings put in. … This is gonna be the rest of our lives,” Erika Boyd told reporters shortly after the City Council’s Finance Committee authorized a $45 million settlement to cover the medical care her son will need for the rest of his life.