LivingSocial said to lay off nearly 10 percent of staff
The daily deals world is awash in financial woes, and LivingSocial is no exception. After a net loss of $566 million in the third quarter, the company is now reportedly about to cut jobs.
Rumor has it that LivingSocial is planning to lay off up to 400 employees tomorrow, according to the Washington Business Journal.
Sources aware of the daily deals company's plans told the Journal that the layoffs will be in U.S. offices and will include various positions and markets. Currently, the company has around 4,500 employees, according to its website, so the layoffs would decrease its staff by nearly 10 percent.
LivingSocial has tried to branch into other markets this past year to make up for its financial woes, which equaled a net loss of $566 million in the third quarter. For example, in July it began offering merchandise as well as coupons. Besides bargains on restaurant meals and weekend trips, customers could also visit the site to buy discounted physical products such as beach games and towels.
Groupon, one of LivingSocial's top competitors, also sells merchandise, having launched Groupon Goods last year. But it, too, has struggled over the past few months. Since the company went public in November 2011, its stock has plummeted about 80 percent. Groupon has also laid off dozens of workers this year, and its board is currently questioning whether founder and CEO Andrew Mason is still fit for the job.
If LivingSocial does indeed lay off 400 employees, it could cause some fallout with Amazon, which is a big investor in the company. Amazon's stake in LivingSocial is $175 million and when its shares tumbled in this year's third quarter, it partially blamed LivingSocial for its under-performance. Of Amazon's $274 million loss in the third quarter, it said that $169 million was related to LivingSocial's poor earnings.
A LivingSocial spokesperson told CNET that the company is declining to comment on the possible layoffs.