 "Groupon to cut 1,100 jobs, to exit from 7 countries")
Daily deals giant Groupon is cutting 1,100 jobs and closing down operations in seven countries – three of them in Asia – as it struggles with slowing growth.
Rich Williams, the company’s chief operating officer, announced this in a blog post today.
He explains: “We’ve taken a close, honest look at where we do business. 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. We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries.”
Rich says the layoffs will come from Groupon’s “deal factory” and customer service departments. The company is exiting the Philippines, Taiwan, Thailand, Morocco, Panama, Puerto Rico, and Uruguay.
In August, Groupon ceased operations in Greece and Turkey and before that, it sold a majority stake in South Korean ecommerce company Ticket Monster.
Groupon launched in 2008, offering bargains and discounts on products and services that were attractive to customers. The novelty and fun of it all made Groupon one of tech’s up and comers, with its 2011 public offer touted as the largest by a US internet company since Google at the time.
Additionally, a 2011 study by Rich University outlined how deals on these sites have failed to generate business for partner merchants, who in turn, shied away from such services. The study found that roughly 80% of customers on these sites are first-timers, and only 20% of them turn into regulars.
Reports say Groupon expects the job cuts to be completed in a year.
