quarter results – Michmutters

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Business

Groupon lays off over 500 staff after reporting net loss of $129m

Groupon lays off over 500 staff after reporting net loss of $129m

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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Categories
Business

Online brokerage company Robinhood lays off almost a quarter of its staff

Online brokerage company Robinhood lays off almost a quarter of its staff

A US online trading platform, which experienced a boom in customers during the pandemic, has slashed its staff by 23 per cent after being hit by the cryptocurrency market crash and record inflation.

It’s the second round of staff sackings for the company called Robinhood, which laid off 9 per cent of its 3,900 employees in April.

Yesterday’s announcement saw the company shed 23 per cent of remaining positions — about 815 jobs — meaning the company will have sacked more than 1000 employees in a matter of months between the two rounds of redundancies. Roles in operations, marketing and program management the most impacted by yesterday’s decision.

Robinhood was embroiled in the Gamestop controversy early last year when Reddit renegades and amateur investors blew up the share price of the brick-and-mortar video game retailers, but this momentum has failed to continue.

Robinhood’s chief executive Vlad Tenev said that letting go of 9 per cent the workforce in April to focus on “greater cost discipline” for the organization “did not go far enough” in a blog post on the company’s website.

“Since that time, we have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody,” Mr Tenev said.

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the Covid era would persist into 2022.

“In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me.”

Last year, Robinhood grew from 700 roles at the end of 2019 to nearly 3,900 by the first half of 2021, but its 2,022 cuts take its total workforce down to 2,600.

Mr Tenev said staff would receive an email and Slack message with their employment status after the company wide meeting announced the redundancies on Tuesday.

He added the cuts were a “painful decision” and meant the company would be “parting ways with many incredibly talented people”, although staff would be given the opportunity to remain with the company until October 1.

Robinhood also revealed its second quarter results which showed its monthly active years plunged to 14 million down by 34 per cent from a year earlier.

Revenue also plummeted by a whopping 44 per cent to $US318 million ($A461 million).

Robinhood became a trading phenomenon during the pandemic as it offered an easy to use, mobile first platform and in the second quarter of last year it boasted more than 21 million active users who were keen to trade crypto and meme stocks.

But with lockdowns in the past, revenue tied to customer’s trading dropped 55 per cent in the latest quarter to $US202 million ($A292 million).

The company has also been slugged with a $US30 million ($A43 million) fine from the New York State Department of Financial Service for alleged violations of anti-money laundering and cybersecurity regulation in its cryptocurrency trading unit.

A global tech bloodbath has seen a spate of companies laying off staff.

In Australia a crypto company called Immutable, which valued at $3.5 billion, is facing a fierce backlash after sacking 17 per cent of its staff from its gaming division, while continuing to “hire aggressively” after raising $280 million in funding in March.

Meanwhile, Australia healthcare start-up Eucalyptus, which provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.

Debt collection start-up Indebted sacked 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.

Then there was Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, with roles primarily based on corporate and new product development.

Another buy now, pay later provider with offices in Sydney called BizPay made 30 per cent of its redundant workforce blaming market conditions for the huge cut to staffing in May.

Earlier this year, a start-up focused on the solar sector called 5B Solar, which boasts backing from former prime minister Malcolm Turnbull, also sacked 25 per cent of its staff after completing a capital raise that would inject $30 million into the business

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