Headquartered in Chicago, Illinois, and co-founded by Chief Executive Officer (CEO) Eric Lefkofsky, Groupon will reportedly lay off 1,100 jobs mainly from the sales and customer service operations of the company.
It will maintain operations in over 30 countries.
Groupon has named seven countries it would be backing out of, in order to make these cuts: Uruguay, Thailand, Taiwan, Puerto Rico, the Philippines, Panama and Morocco.
The company plans to complete the layoffs by September 2016 and expects charges related to the restructuring to reach up to $35 million, with about $22 million to $24 million being spent in the third quarter of 2015.
“We saw that the investment required to bring our technology, tools, and marketplace to every one of our 40-plus countries isn’t commensurate with the return at this point, Williams explained”.
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. The reason cited for this step taken by the company was that it failed to meet the financial expectations in these countries. “Simply put, we are a stronger, faster Groupon today because of this work”, Williams said. Groupon aims to restore the correct balance to its strategy.
This comes as a sharp turnaround in the tech firms fortunes as it turned down a multibillion-dollar buyout offer from Google in 2010 at its peak whilst it focused on the company’s existing path whilst becoming a publicly traded company. 10 percent of the overall workforce of the company.
Back in December 2014, Groupon had 12,000 employees, as per a regulatory filing.
The Washington Post reports a decline of 2.5 percent in the company’s stock in morning trading Tuesday to about $4 (AU$5.68) a share.
According to BBC news, a study conducted by Professor Utpal Dholakia at the Rice University revealed that small and medium-sized business said they had lost money to Groupon’s Daily Deal component. Adding to Groupon’s misery was lack of investment, which further aggravated its inability to keep up with local rivals.