Groupon is laying off 500 employees, or nearly 15% of its global workforce, as the struggling Chicago-based online marketplace seeks to cut costs amid falling revenues.
The total includes 293 positions associated with the headquarters at 600 W. Chicago Ave., although many employees are working remotely, Groupon spokesman Nick Halliwell said Monday evening.
The company saw a 42% decline in revenue and a $90 million loss during the second quarter, according to an earnings report Monday. The weaker than expected results prompted Groupon to implement a $150 million cost-cutting strategy that includes “rationalizing” its real estate footprint, transitioning to a “self-service” merchant sales platform and reducing the size of its technology and sales teams.
Groupon CEO Kedar Deshpande sent a letter to employees Monday outlining the plans to streamline the cost structure, including the “difficult to digest” news of the impending layoffs.
People are also reading…
- Canceled flight causes Jimmie Allen to miss Mississippi Valley Fair concert
- Family killed at Iowa park shot, stabbed, strangled, autopsy shows
- Deere moving jobs to Mexico but says no plans to relocate Quad-City workers
- 'He did not deserve to be murdered,' says mother of man killed by Scott County Deputy
- Times, local media sue Bettendorf School District
- UPDATE: Davenport Police Department identifies serial spray-painting suspect
- From surviving to thriving: New owners at ESCP triple employment, sales in 2 years
- 2 hospitalized with life-threatening injuries after crash near Eldridge
- Two Individuals identified from rollover crash on Highway 61 Friday afternoon
- Thiel to serve 90 days for boat fatalities
- Head-on collision Monday leaves one driver dead
- Onawa teen sentenced to 20 years prison for raping girls
- Quad-Cities All-Metro softball team
- Southeast Little League wins regional quarter on Bishop's walk-off sacrifice
- Wisconsin couple killed by lightning were celebrating wedding anniversary in D.C.
“Put simply, our cost structure and our performance are not aligned,” Deshpande said in the employee letter, which was obtained by the Tribune. “In order to position Groupon to successfully execute our turnaround plan, we have to lower our cost structure.”
Groupon had 3,416 employees at the end of the second quarter, including nearly 1,100 based out of the Chicago headquarters, according to Halliwell. The company had more than 11,000 employees worldwide at its peak in 2012.
In addition to the layoffs and other cost-cutting measures, Groupon is closing its Australian Goods business, which runs on a different platform than the rest of the Groupon Goods business, making it “too costly and complex to manage on an ongoing basis,” Deshpande said in the letter.
The former CEO of Zappos, Deshpande joined Groupon in December as the company, hard-hit by the pandemic, saw its 2021 annual revenue fall by more than 56% from 2019, according to financial filings.
Once the face of Chicago’s tech startup scene, Groupon has been in decline for much of the past decade.
Google tried to buy Groupon for $6 billion in 2010, but investors said no deal. By spring 2011, Groupon was valued at $25 billion. The current market capitalization is about $415 million.
Launched in 2008, Groupon created its own e-commerce niche with heavily discounted daily deals on everything from manicures to meals, blasted out to subscribers via email. The business model subsequently expanded to include stocking and shipping products through the Goods platform, which put it in direct competition with online retail giant Amazon.
The company has since shifted exclusively to a third-party business model and now promotes itself as an online local marketplace where consumers go to buy services and experiences. Recent Chicago-area offerings include a Chicago River boat tour, discounts on Krispy Kreme doughnuts in Homewood and a pole dancing class in Aurora.
In the second quarter, Groupon generated global revenue of $153 million, down from $206 million during the same period last year. The company had projected $670 million to $700 million in revenue for 2022, but withdrew its full-year guidance Monday because of the turnaround strategy and the “uncertain” macroeconomic environment, according to earnings reports filed with the Securities and Exchange Commission.
Deshpande said in his letter that the “vast majority” of the cost-cutting actions would happen this year.
Departing employees were notified Monday, with some asked to stay on for a period of time to assist with the transition, according to the letter. Where possible, they will be given the option to keep their laptops, avail themselves of outplacement services and submit their information to a Groupon talent list to be posted on LinkedIn.
Details on severance packages were not disclosed.
Today’s top pics: Bolivia clashes and more
A coca farmer kicks a tear gas canister back a police on the third day of clashes near a coca market in La Paz, Bolivia, Wednesday, Aug. 3, 2022. Anti-government coca farmers are protesting against a new, parallel coca leaf market. (AP Photo/Juan Karita)
A fan of Brazil's Atletico Mineiro soccer team cheers as he waits for the start of a Copa Libertadores quarter-final first leg match against Brazil's Palmeiras at Mineirao stadium in Belo Horizonte, Brazil, Wednesday, Aug. 3, 2022. (AP Photo/Thomas Santos)
Attorney General Merrick Garland with Assistant Attorney General Kristen Clarke for the Civil Rights Division, speaks during a news conference at the Department of Justice in Washington, Thursday, Aug. 4, 2022. The U.S. Justice Department announced civil rights charges Thursday against four Louisville police officers over the drug raid that led to the death of Breonna Taylor, a Black woman whose fatal shooting contributed to the racial justice protests that rocked the U.S. in the spring and summer of 2020. (AP Photo/Manuel Balce Ceneta)
New Zealand's Havana Rosalie Hopman during the Rhythmic Gymnastics, Team Final and Individual Qualification – Sub Division 1 during the Commonwealth Games at Arena Birmingham, Birmingham, England, Thursday, Aug. 4, 2022. (Zac Goodwin/PA via AP)
New Zealand's Paris Brooke Chin during the Rhythmic Gymnastics, Team Final and Individual Qualification – Sub Division 1 during the Commonwealth Games at Arena Birmingham, Birmingham, England, Thursday, Aug. 4, 2022. (Zac Goodwin/PA via AP)
Advait Page of India stretches before starting in the Men's 1500 meters freestyle final during the swimming competition of the Commonwealth Games, at the Sandwell Aquatics Centre in Birmingham, England, Wednesday, Aug. 3, 2022. (AP Photo/Kirsty Wigglesworth)
Team England celebrate after winning the bronze medal in the Women's 4×100 meters medley relay final during the swimming competition of the Commonwealth Games, at the Sandwell Aquatics Centre in Birmingham, England, Wednesday, Aug. 3, 2022. (AP Photo/Aijaz Rahi)
Athletes compete in the Men's 4×100 meters medley relay final during the swimming competition of the Commonwealth Games, at the Sandwell Aquatics Centre in Birmingham, England, Wednesday, Aug. 3, 2022. (AP Photo/Aijaz Rahi)
Fans light flares during the first half of a Leagues Cup soccer match between the Los Angeles FC and the Club America Wednesday, Aug. 3, 2022, in Inglewood, Calif. (AP Photo/Mark J. Terrill)
Fabio Guarin, 76, plays a cello for tips which he said he uses to buy his meals in the La Candelaria neighborhood of Bogota, Colombia, Thursday, Aug. 4, 2022. Guarin said he used to earn money playing in an amateur band known as a "toque," hired for bars and private events. (AP Photo/Fernando Vergara)
United States' Jennifer Kupcho plays her tee shot from the 13th, during the first round of the Women's British Open golf championship, in Muirfield, Scotland Thursday, Aug. 4, 2022. (AP Photo/Scott Heppell)
A person wears protective gear as they stand close to the lava flowing from Fagradalsfjall volcano in Iceland on Wednesday Aug. 3, 2022, which is located 32 kilometers (20 miles) southwest of the capital of Reykjavik and close to the international Keflavik Airport. Authorities in Iceland say the volcano in the southwest of the country is erupting just eight months after its last eruption officially ended. (AP Photo/Marco Di Marco)
A young Kashmiri boy watches a Muharram procession in Srinagar, Indian controlled Kashmir, Thursday, Aug. 4, 2022. Muharram is a month of mourning in remembrance of the martyrdom of Imam Hussein, the grandson of Prophet Mohammed. (AP Photo/Mukhtar Khan)
A Kashmiri Shiite Muslim shouts religious slogans during a Muharram procession in Srinagar, Indian controlled Kashmir, Thursday, Aug. 4, 2022. Muharram is a month of mourning in remembrance of the martyrdom of Imam Hussein, the grandson of Prophet Mohammed. (AP Photo/Mukhtar Khan)
A woman walks past an electoral mural calling for peace, in the low-income Kibera neighborhood of Nairobi, Kenya Thursday, Aug. 4, 2022. Kenya is due to hold its general election on Tuesday, Aug. 9 as East Africa's economic hub chooses a successor to President Uhuru Kenyatta. (AP Photo/Brian Inganga)
Italy's former Interior minister, Matteo Salvini and Leader of The League party, center, visits the migrant reception center in the Sicilian Island of Lampedusa, Italy, Thursday, Aug. 4, 2022. Salvini is making a stop Thursday on Italy's southernmost island of Lampedusa, the gateway to tens of thousands of migrants arriving in Italy each year across the perilous central Mediterranean Sea. (AP Photo/David Lohmueller)
Colorado Rockies starting pitcher Chad Kuhl works against a San Diego Padres batter as fans turn on lights on their phones during the sixth inning of a baseball game Wednesday, Aug. 3, 2022, in San Diego. (AP Photo/Gregory Bull)
WNBA star and two-time Olympic gold medalist Brittney Griner, center, is escorted in a court room prior to a hearing, in Khimki just outside Moscow, Russia, Thursday, Aug. 4, 2022. Closing arguments in Brittney Griner's cannabis possession case are set for Thursday, nearly six months after the American basketball star was arrested at a Moscow airport in a case that reached the highest levels of US-Russia diplomacy. (AP Photo/Alexander Zemlianichenko)
A man exercises in a park in Kramatorsk, Donetsk region, eastern Ukraine, Wednesday, Aug. 3, 2022. (AP Photo/David Goldman)
Lilia Panchenko says her final goodbye to her son, Oleh, during his burial service in Pokrovsk, Donetsk region, eastern Ukraine, Thursday, Aug. 4, 2022. Oleh Panchenko, 48, a Ukrainian soldier, was killed in battle with Russian forces July 27 in the Donetsk region. (AP Photo/David Goldman)
Community members stand around an injured illegal gold miner near Krugersdorp, South Africa, Thursday, Aug. 4, 2022. Community members beat suspected illegal miners with sticks and set fire to their camps following the alleged gang rapes of eight women by miners last week. (AP Photo/Denis Farrell)
Community members burn materials abandoned by illegal miners in Krugersdorp Johannesburg, South Africa, Thursday, Aug. 4, 2022. Community members in the South African city of Krugersdorp beat suspected illegal miners with sticks and set fire to their camps on Thursday in an outpouring of anger following the alleged gang rapes of eight women last week by more than 80 men suspected of being miners. (AP Photo/Themba Hadebe)
'); var s = document.createElement('script'); s.setAttribute('src', 'https://assets.revcontent.com/master/delivery.js'); document.body.appendChild(s); window.removeEventListener('scroll', throttledRevContent); __tnt.log('Load Rev Content'); } } }, 100); window.addEventListener('scroll', throttledRevContent); The business news you need
Get the latest local business news delivered FREE to your inbox weekly.
