Chicago based e-commerce marketplace firm Groupon has decided to lay-off more than 500 of its workers. These layoffs constitute to around 15% of their total workforce. Moreover, the laid off employees belong to merchant development, sales, recruiting, engineering, product and marketing teams.
Efforts to improve cash flows
Groupon spokesperson Nick Halliwell said that 293 of the 500 shed jobs are from Illinois. However, he did not comment regarding the employees working at Groupon’s Chicago’s office. Although, they have already put their 600 W. Chicago Ave office space up for sublease. Moreover, Halliwell said Illinois-based positions could include workers living in another state as employees from various states are working remotely. Furthermore, the company is also reinvesting in marketing and customer drive initiatives to improve the purchase frequency. Hence, the company expects to improve their cash flows though job cuts and other initiatives.
Groupon expects to save around $200 million
“Put simply, our cost structure and our performance are not aligned. In order to position Groupon to successfully execute our turnaround plan, we have to lower our cost structure. CEO Kedar Deshpande said in a message to employees. Furthermore, Deshpande said the cuts will occur in the North American sales division and technological services. In addition, Groupon is also closing its Australia Goods business. The company is claiming that the job cuts will result in saving about $150 million. In addition, Groupon is hoping to save another $50 million by the end of 2023. Previously, the company reported a loss of $91.2 million during the second quarter which is much higher than the loss during same period last year.
Severance packages for outgoing workers
Groupon has pledged to offer severance and outplacement assistance to the laid off workers. Moreover, the company expects to sail through from this crisis through the restructuring efforts. “We are well positioned to transform our company and we are laying the foundation for growth. Together, we can create a fundamentally better experience for our customers and merchants.” Deshpande further stated in his message to the employees.
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