Groupon to Lay Off 10 Percent of Its Sales Staff

By Chuck Sudo in News on Oct 27, 2011 4:15PM

Groupon loses more luster to its shine with today's announcement the online daily deal pioneer plans to lay off 10 percent of its sales force of over 4,800.

Groupon founder Andrew Mason told investors in Boston the layoffs are part of a plan to win stronger deals from merchant partners and ensure growth. We're also guessing the move is being made with Groupon's IPO looming in an attempt to maximize the valuation of the company. Groupon has taken some hits since filing its IPO Prospectus in June. Originally thought to have earned the company $750 million and valuing Groupon at $30 billion, their most recent prospectus amendment showed investors may be cooling on the company.

Groupon is now hoping to raise between $480 and $540 million once the IPO is a go and valuing the company between $9.6 and $10.8 billion. That's closer to the supposed $6 billion Google offered Groupon last November.

The layoff announcement comes as more money managers and analysts are skeptical on Groupon as the market for online daily deals cools and more competitors emerge. Since filing their IPO prospectus, Groupon has been involved in a comedy of errors that has an increasing number of critics calling the company "The Small Business Owner's Payday Loan."