Due to the tough competition, Groupon is continuing to make cuts in its workforce in order to stay afloat. With over 30 million active customers and mounting expenses, this move alone may not be enough to keep the company afloat. However, by reducing headcount Groupon can economize on costs and continue providing its services at a lesser cost than their competitors.
The company said that the layoffs would be spread across the first two quarters of this year in order to “streamline our operations.” This announcement comes after a disappointing fiscal 2016 where the company reported a loss of $127.3 million. With these layoffs and their investor feedback in mind, it is hoped that 2017 can be more successful for the company.
Under the second phase of the restructuring plan, Groupon is expected to reduce its workforce by 500 positions globally. Many of these cuts are slated to take place by the end of the second quarter of 2023, which will result in a reduction in staffing levels. This move is part of a larger cost-saving plan announced in August 2022 and it is expected to save Groupon millions each year.
With the recent round of layoffs at Uber, the company has announced that it will be cutting almost 20% of its employee base. This will have a significant impact on how services are provided to customers and could eventually lead to higher prices for rides.
The layoff of Groupon’s employees seems to have affected morale negatively among those who were let go. Kirstin Barbor, the company’s Chief People Officer, said that “had to part ways with several very talented teammates in NAM, across all levels of leadership.” This news may have caused some resentment and a general decline in productivity within the group. Although Groupon has not been forthcoming about how many employees were let go, it is safe to say that it was a large number.
Groupon, one of the largest online companies known for selling discount vouchers and coupon codes, has announced that it is laying off a significant number of employees. Reports state that the company is firing around 1% of its total workforce, or about 40 people in total. While no specific reason has been given for the layoffs, analysts have suggested that it may be related to increased competition from other online marketplaces such as Amazon and Google.
Groupon’s challenges stem from the company’s growth exceeding user expectations. In addition, Groupon has been struggling to keep up with other e-commerce websites such as Amazon, which have risen in popularity in recent years. These challenges may cause Groupon to experience a decrease in users, and as a result, revenue.
The job cuts are likely to save the company millions in annual costs. The company anticipates that it will save anywhere from $5 million to $30 million annually because of the layoffs. Some of the savings may be realized through reductions in employee benefits and wages, as well as through improved efficiency in the organization
Some of the non-payroll actions outlined within the 2022 Cost Savings Plan could include reducing technology costs, which would help save money on expenses related to software and services. Furthermore, these cost savings could be further increased if other areas of the company are streamlined in an effort to create even more savings.
