Groupon to slash 1,100 jobs in the next year
The daily-deals and e-commerce site is about to go through some major downsizing, cutting about 10 percent of its workforce and ending operations in half a dozen countries.
Groupon plans to cut about 1,100 jobs, mostly in its sales and customer service operations, and end doing business in several markets around the world, the company said Tuesday.
The job cuts represent about 10 percent of the company's global workforce. As part of the cost-cutting measures, Groupon's operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay will all close. Previously, the daily-deals and local-commerce site was active in over 40 countries.
"We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries," Chief Operating Officer Rich Williams said in a blog post.
The downsizing underscores Groupon's recent efforts to move away from its roots as a daily-deals site -- offering discounts on services and products -- to a company with a greater focus on e-commerce. That space, however, is already highly competitive, thanks to big-time, established players like Amazon and eBay. In July, Groupon announced it would compete against Amazon, Uber, Yelp, Instacart and other companies with its own food delivery and takeout service.
According to the statement filed with the Securities and Exchange Commission, the company expects pretax charges of up to $35 million, including approximately $22 million to $24 million in the third quarter of 2015. The full restructuring should be completed by September 2016. Groupon said the cost savings will be reinvested in the business.
"Just as our business has evolved from a largely hand-managed daily-deal site to a true e-commerce technology platform, our operational model has to evolve," Williams wrote. "Evolution is hard, but it's a necessary part of our journey. It's also part of our DNA as a company and is one of the things that will help us realize our vision of creating the daily habit in local commerce."
Shares of Groupon fell 9 cents, or about 2 percent, Tuesday to close at $4.08. They have lost half their value this year and are down 41 percent over the last 12 months.