Daily deals website Groupon is dropping out of seven international markets and laying off 1,100 employees in response to poor sales. Although how it will affect its Australian operations are, as yet, unclear.
The online-coupon company started back in 2008 in Chicago with an valuation of US$1 billion. By 2010, according to a report by investment company Morgan Stanley, Groupon was worth US$500 million in revenue. The same year, Groupon rejected a US$6 billion buyout offer from Google and by 2011 it was worth nearly US$13 billion.
The company hit a rough patch in 2012: share prices plunged and sales fell, with investors dropping out of the company. According to SEC filings, reported by Ars Technica, between 2009 and 2013 the company lost US$820 million and suffered a net loss of $22.8 million in the second quarter of 2014.
In response to Groupon’s bad report, Groupon’s COO Rich Williams said in a statement that the company would be shedding about 10 per cent of its workforce, mostly in the company’s sales departments.
“Over the next several months we will eliminate approximately 1,100 positions, primarily in international deal factory and customer service.
“Our teams have done great work to streamline our operations in these and other areas, and our global capabilities and strong regional service centers allow us to do more with less while still providing the high level of service our customers expect and trust.
“Alongside this process, we’ve also taken a close, honest look at where we do business.
“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. So, we decided to exit a number of countries where the required investment and market potential don’t align. You likely saw that we recently exited Greece and Turkey. We are also ceasing operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay.”