14 DAY TRIAL // Groupon management has announced plans to lay off over 1,100 employees and shut down operations in over 7 countries, in a move which will cost the company at least $35 million / €31.3 million, before taxes.
The news was announced on the company's blog by Rich Williams, Groupon COO, and comes to pile on recent bad news coming out of the company's headquarters.
Groupon was founded in 2008 and became a worldwide sensation thanks to its very popular daily deals format. The company expanded quite rapidly and spurred thousands of clones around the Web, all offering daily deals at extremely low prices.
This eventually created a bubble effect, which around three or four years ago popped, taking down most of the clone sites.
The only one left standing was Groupon, but the company is not doing that great either, shifting operations in recent years from a daily deals site to one focused on local businesses, not necessarily offering "great deals."
This move eventually hit the company in its bottom line, earlier this year Groupon's management closing down shop in Turkey, Greece, and selling its Indian division to Sequoia.
While at the start of the year Groupon was active in 43 countries, now it only serves 33, after agreeing to also exit from Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay, all by the end of September 2016.
Employees will get severance pay
Over 1,100 employees will be let go, costing the company $35 million / €31.3 million in severance, compensation, and various benefits.
Most of the employees who will be laid off work in the company's sales and customer support.
"Let’s be clear: these are tough actions to take, especially when we believe we’re stronger than ever. We’re doing all we can to make these transitions as easy as possible, but it’s not easy to lose some great members of the Groupon family" said Rich Williams. "Yet just as our business has evolved from a largely hand-managed daily deal site to a true ecommerce technology platform, our operational model has to evolve."
The company has a positive tone in its blog post, but let's be honest. When did you hear of anything interesting coming out of Groupon's site lately?