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Groupon cuts 15% of workforce following net loss of $91 million in Q2

According to news reports, American multinational ecommerce company, Groupon, has laid off nearly 15% of its total workforce as part of implementing stringent cost cutting measures.

500 + employees from various segments and departments such as merchant development, sales, recruiting and engineering has been laid off. The major part of the lay odds would happen in Illinois office of the e-commerce company.

Groupon, based in Chicago, State of Illinois, got launched in 2008 as an online marketplace, where local businesses and producers can sell their products to consumers on the platform. The company used a unique business model in which, the more number of people who’s interested in a product, the more would be the discount on it.

The report stated that the total headcount of people working in Groupon was, 3416 before the lay offs occurred.

Chief Executive Officer of Groupon, Kedar Deshpande told TechCrunch that the recent actions of the company to cut the posts and lay offs were part of the companies decision to improve the trajectory of the business.

He said that the financial performance by the business entity, during the current financial year, was not up to the mark expected by the management. Groupon had earlier reported a decline of 42% in its revenue, compared to previous financial year. Earnings Per Share of the company also declined by 0.34 dollars per share. The company posted a net loss of 91 million dollar in second quarter, compared to 3.4 million in Q2 in previous financial year.

In a letter to all employees, Kedar Deshpande, on Monday, stated that the company was on a mission to transform itself “into the destination for Local experiences and services”.

CEO also stated that company would be cutting down sales team responsible for North America and reorganise and restructure the firm to cater critical needs of the business. Groupon would also make changes regarding office policy and real estates owned by the company in order to align with the new demands and characteristics of hybrid work model.

One of the biggest announcement made by the company, yesterday was regarding the closing down of Australia Goods business. Senior level management of the company was of the opinion that the Australia Goods business, being a separate platform, was causing large amounts of extra expenses and costs which is too much for the company to bear at this time.

Groupon is planning to reduce the expenses by at least 150 million dollar by the end of this year.

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