Online coupon business Groupon has culled more than 500 employees in a bid to reduce costs due to poor business performance.
It’s understood staff were cut from the business’s merchant development, sales, recruiting, engineering, product and marketing teams, with the cuts representing roughly 15 per cent of the company’s global 3416 work force.
The move comes as Groupon reported a US$90.3 million (A$129.3 million) net loss in its second quarter results on Monday. The company reported a steep “decline in engagement” and a 42 per cent year-on-year drop in revenue at $153.2 million.
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In Groupon’s earnings release statement, chief executive Kedar Deshpande said the company would be prioritizing “taking decisive actions to improve our trajectory” after the lower-than-anticipated result.
“We are significantly reducing costs, and based on the progress we’re making on our initiatives to drive customer purchase frequency, we are now ready to begin
reinvesting in marketing to drive growth,” he said.
In a letter to staff sent on Monday, Mr Deshpande stressed the business would be “leaning on” outsourcing staff and focusing “only on mission-critical activities”, TechCrunch reports.
The letter indicated Groupon would also be re-evaluating its real estate assets, in what could be a shift to more remote or a blended working environment.
Mr Deshpande said he believed the company could begin to generate positive cash flow by the end of 2022, while increasing “purchase frequency and customer retention”.
In order to turn around the business, the quarterly report flagged “reducing our cost structure” and improving their customer experience as their two key strategies. Part of this included reducing their tech costs by $US60 million ($A85.99 million), which equates to 30 per cent of Groupon’s annual spend.
In Australia, Groupon has been operating since 2011, with its website claiming the company has built a customer base of 3.3 million across 26,000 merchants.
The site allows customers to buy discounted experiences and products, with the business earning affiliate revenue for the sales. A wide range of offers are available on products from discounted pink slips and car safety checks, to massages and helicopter rides.
It’s unclear how the staff cuts will impact the company’s Australian workforce, however news.com.au has reached out for comment. As it stands, the company is still advertising for four sales and buying roles within their Sydney offices.
While the latest round of lay-offs are significant, they’re a fraction of what the company experienced as a result of the Covid pandemic. In April 2020, the company stood down about 2,800 employees, which amounted to 44 per cent of its work force.
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