US-based e-commerce marketplace Groupon has terminated jobs of more than 500 of its employees — 15 percent of its 3,416-person headcount.
The reduction impacted employees in teams, including merchant development, sales, recruiting, engineering, product and marketing.
“Our business performance is not at the levels we anticipated and we are taking decisive actions to improve our trajectory,” Groupon CEO Kedar Deshpande said in a statement.
The job cut, as well as a reinvestment in marketing and initiatives that drive customer purchase frequency, will set the company up to generate positive cash flow by the end of 2022, according to a report in Tech Crunch.
Kedar Deshpande, in a letter to staff, said that Groupon is reducing its North America sales teams to focus on self-service merchant acquisition capabilities.
It is also re-organizing the company to focus only on mission-critical activities and leaning on more external support.
Groupon is also proposing to reduce cloud infrastructure and support functions.
Groupon is also closing down its Australia Goods business, more than a decade after launching there in the first place. Groupon will rationalize its real estate footprint to be more in line with hybrid work.
Groupon has begun executing a cost savings plan to reduce current cost structure by $150 million annually in phase. Groupon expects to incur between $10 million and $20 million in restructuring costs in connection with these actions.
Groupon will identify an additional $50 million of savings and related cost actions by the end of 2023. Groupon will be right-sizing tech organization to align with current and future business needs. Groupon aims to reduce tech costs by approximately $60 million or nearly 30 percent of the annual spend in phase 1.
Groupon reported revenue of $153.2 million (–42 percent) in the second quarter 2022 and net loss of $90.3 million in the second quarter 2022 compared with $3.1 million in the prior year period.