Groupon lays off hundreds of employees

E-commerce giant is latest tech firm to cut jobs ahead of anticipated recession

Groupon lays off hundreds of employees

Groupon, the Chicago-based e-commerce marketplace, has joined the growing list of American employers reducing headcount ahead of an anticipated recession.

The company has laid off more than 500 employees, about 15% of its workforce, TechCrunch reported. The merchant development, sales, recruiting, engineering, product and marketing teams were all impacted.

Read more: How HR leaders should manage layoffs ahead of recession

In a letter to staff, CEO Kedar Deshpande said that Groupon is reducing its North America sales teams to focus on “self-service merchant acquisition capabilities.” The company is also being restructured to focus “only on mission-critical activities and leaning on more external support.”

As a result, Groupon is shuttering its Australia Goods business and proposing to “reduce cloud infrastructure and support functions as we wrap up cloud migrations.” The company also plans to “rationalize” its real estate footprint in a hybrid work world. “Our overall business performance is not at the levels we anticipated, and we are taking decisive actions to improve our trajectory,” Deshpande told TechCrunch.

“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. Over the last three months the senior leadership team has been challenging our current processes and automating how we work, both with an eye toward taking costs out of the business and improving our productivity,” Deshpande said in a statement, according to FOX 32 Chicago.

“For those of you whose roles are impacted today, we’re sincerely grateful for all of the contributions that you have made and want to do our best to support your success in the next steps of your career. For certain employees in International, you will be notified of our proposed changes and will enter into a consultation phase over the coming days and weeks,” Deshpande added.

Major brands throughout the United States, especially in California, have been trimming their workforces ahead of an economic downturn. Last week, Fender laid off roughly 300 employees, ranging from senior management to production line workers, have been laid off, Guitar.com reported. That followed Robinhood announcing plans to lay off 23% of its workforce. In April, the Menlo Park, CA-based company reduced its headcount by 9% after company shares hit a new low, CNN Business reported.

More than 450 startups and tech firms have laid off more than 75,000 people in 2022, according to professional social network Blind’s tech layoffs tracker. In just the past month alone, more than 20,000 jobs were cut. Additionally, tech giants Apple and Google have prepared to slow down hiring efforts into 2023.

Last month, Vox Media laid off 39 employees in the sales, marketing, recruiting and editorial departments, CNBC reported. Additionally, the mass media company with offices in New York City and Washington D.C. will be slowing down hiring and reducing non-essential expenses. That came after CNBC reported that 7-Eleven has eliminated about 880 corporate jobs in the United States. The Dallas-headquartered company’s Irving, TX and Enon, OH, support centers were impacted, as well as field support roles. The workforce reduction comes roughly one year after the convenience store chain completed its $21 billion acquisition of rival Speedway.

Google told employees that it’ll be “slowing down the pace of hiring for the rest of the year,” according to an internal memo by CEO Sundar Pichai obtained by The Verge. Pichai said the Mountain View, CA-based company isn’t freezing hiring entirely; it’ll still hire for “engineering, technical and other critical roles.” But the pullback will mean “pausing development and re-deploying resources to higher priority areas,” according to the memo.

The memo came on the heels of Meta, formerly known as Facebook, giving engineering managers a deadline to identify anyone on their team who “needs support” and report them in an internal HR system, The Information reported. “If a direct report is coasting or is a low performer, they are not who we need; they are failing this company,” wrote Maher Saba, the company’s head of engineering. “As a manager, you cannot allow someone to be net neutral or negative for Meta.”

In July, Meta CEO Mark Zuckerberg told staffers during a companywide call that not everyone was meeting the Menlo Park, CA-based company’s standards and that some might want to leave voluntarily, Reuters reported. Zuckerberg added the company planned on reducing plans to hire engineers by at least 30% this year.

“If I had to bet, I’d say that this might be one of the worst downturns that we’ve seen in recent history,” Zuckerberg said. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”

Over the past couple months, JPMorgan Chase & Co., the biggest bank in the United States, and Coinbase, the biggest crypto currency exchange in the country, have both laid off hundreds of employees. Streaming giant Netflix followed suit, announcing its second round of cuts within two months. Tesla went one step further by closing its San Mateo, CA-based facility, laying off hundreds in the process. With the housing, crypto and tech markets all facing upheaval, more companies are expected to trim their workforce in the months to come.

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