Groupon Announces 1,100 Job Cuts By Next Year

By Rachel Cromidas in News on Sep 22, 2015 2:13PM

Groupon's epic story of boom and—possibly—bust may be taking another turn for the worse: The Chicago-based company just announced plans to cut nearly 10 percent of its workforce over the next year.

The Tribune reported the cuts Tuesday morning, noting that it represents a sizable chunk of Groupon's over 10,000 employees.

Groupon has offices around the world, so it is unclear whether the cuts will hit Chicago's offices at all. The e-commerce company said in a blog post that the cuts will mainly come from the international Customer Service and Deal Factory teams.

Groupon officials said the cuts are due to a need to restructure international operations and will be completed by September 2016. Groupon left Turkey and Greece in August, and will be leaving Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay because the cost of operating there outweighed the benefits, according to the blog post.

"We saw that the investment required to bring our technology, tools and marketplace to every one of our 40+ countries isn’t commensurate with the return at this point," Groupon executive Rich Williams wrote. "Let’s be clear: these are tough actions to take, especially when we believe we’re stronger than ever."

Groupon, once the golden child of Chicago's tech startup scene, seems to have fallen from grace since its initial public stock offering of $26.11 a share in 2011. Shares fell below $5 a piece earlier this summer, following longtime suggestions that its growth-oriented business model was unsustainable.