Chicago-based Groupon, the shrinking provider of online deals for local and national merchants, is laying off 500 people to deal with financial losses and plummeting revenue.
The new cutbacks, disclosed in a securities filing, come less than six months after Groupon announced separate plans to cut staff by about 500 workers. Its last reported employee headcount was 3,077 at the end of the third quarter last year, about 800 fewer people than it had 12 months earlier.
Spokesman Nicholas Halliwell declined to say which locations or types of jobs would be most affected. The company has offices and data centers around the world. Its Chicago headquarters is at 600 W. Chicago Ave., but it has offered a large portion of it for sublease in a market that has seen many companies reduce office requirements.
In its filing, Groupon said the new layoffs should be completed by July and save about $70 million annually. It said the cutbacks will cost $10 million and $20 million for severance and other compensation, adding to $9.6 million incurred for last year’s layoffs.
Groupon also reported that additional cost cuts for technology, software and professional services will save $30 million a year.
In its most recent earnings report, Groupon registered a loss of $180.1 million for the first nine months of 2022, compared with a profit for the same period in 2021. Its revenue fell nearly 40% to $450.9 million.
At the time, Groupon CEO Kedar Deshpande said the company was making progress on a turnaround strategy that included cost cuts and enhancing customer experience.
“I believe that if we get these two strategic priorities right, we can do a substantively better job meeting our customers’ needs every time they come to our marketplace and driving them to buy local experiences and services from the Groupon marketplace more frequently,” he said. “Improving local purchase frequency is the most important measure of how well we are executing our strategy, and we are going to be relentless in driving this metric higher.”
Pandemic shutdowns of small merchants hurt Groupon’s business as has growing competition for online sales.
Groupon is a publicly traded company and its shares have lost more than 70% of their value in the past 12 months.
