Natalia Chi
Groupon plans to lay off another 500 employees, further thinning the stagnant Chicago-based online marketplace.
The restructuring plan, approved by the company’s board last week, is expected to eliminate most positions by the end of the second quarter, according to the Securities and Exchange Commission filed Monday. Groupon is projected to save $70 million a year through job cuts.
As of late December, Groupon has more than 2,500 employees worldwide, according to a Groupon spokesperson. In other words, this round of layoffs could reduce the company’s shrinking workforce by up to 20%.
The company declined to disclose how many positions will be cut at its Chicago headquarters.As of last summer, about a third of the world’s workforce was based in Chicago.
In August, Groupon announced it would lay off 500 employees in an attempt to cut costs amid declining revenues. This string of layoffs included his 293 positions associated with Groupon’s headquarters at 600 West Chicago Avenue.
At the end of the third quarter, Groupon reported 3,077 headcount worldwide. This includes his 318 employees who were laid off in Phase 1 of the restructuring plan but are still working during the notice period. The company plans to update its headcount in its yet-to-be-released fourth-quarter earnings report.
Groupon posted revenue of $451 million in the first nine months of 2022, down 39% year-over-year. Net income for the same period in 2021 was $89 million for him, but by September he lost $182 million.
Once a face on Chicago’s tech startup scene, the company had over 11,000 employees worldwide at its peak in 2012.
Founded in 2008, Groupon has created a unique e-commerce niche that delivers daily deals via email to subscribers with deep discounts on everything from nail polishes to meals. The business model has since expanded to stock and deliver goods through the Goods platform, competing directly with online retail giant Amazon.
Since then, the company has moved exclusively to a third-party business model and now positions itself as an online local marketplace where consumers buy services and experiences. He took over the helm of Groupon in December 2021. He has been implementing a “revitalization strategy” under former Zappos CEO Kedar Deshpande.
Last month, Deshpande posted a year-long update on the company’s progress, citing improvements to Groupon’s local marketplace and inventory, increased purchase frequency, and an improved customer experience. position.
But Groupon has been in rapid decline for much of the last decade, and its once-groundbreaking business model has struggled to find its appeal in a much more crowded and competitive digital marketplace.
Google tried to buy Groupon for $6 billion in 2010, but investor and co-founder Andrew Mason said the deal fell through. By 2011, Groupon’s valuation had reached his $25 billion mark, and the company went public that fall, raising $700 million in the largest tech initial public offering since Google.
Current market capitalization is around $254 million.
Groupon moved to its River North headquarters in 2010 and remains one of the largest tenants at the former Montgomery Ward catalog warehouse, leasing over 300,000 square feet through January 2026.
All spaces are listed for sublease.
In 2016, Groupon subleased a two-story, 57,000-plus-square-foot property to Uptake Technologies for 10 years. But in a lawsuit filed in Cook County Circuit Court earlier this month, Groupon alleges that Uptake hasn’t paid him since July, owing him about $1.48 million in unpaid rent.
Groupon declined to comment on the lawsuit, but an Uptake spokesperson was not immediately available Monday night.
rchannick@chicagoribune.com
