Global daily deals and coupons website GroupOn announced earlier yesterday that it will be sacking close to 1,100 of its employees in a bid to cut costs. These thousand odd employees working for its sales and customer service operations will be discharged from their duties by early next year.
Groupon has also announced in its blog post that it will be shutting down its operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay among others, signalling at massive decline of the coupons business — a market segment which has been a people’s favourite but marred by massive glut.
Groupon’s Indian wing was bought by global VC firm Sequoia in March this year. Following the closure and the company’s operations are currently functional in 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,
COO Rich Williams noted in a blog post the company just put up on the news. Before the closures, Groupon was active in over 40 countries.
The company’s restructure will be completed by September next year and the money saved by laying-off more than 1000 jobs will be used to run its current operations.
“Substantially all of the pre-tax charges are expected to be paid in cash and will relate to employee severance and compensation benefits, with an immaterial amount of the charges relating to asset impairments and other exit costs”.
“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.”
Groupon, launched in 2008, connects more than 40 million users with local merchants in over 40 countries across the world. The job cuts account for at least 9.3% of Groupon’s workforce. The company also plans to account total charges of close to $35 million related to the job cuts.