Groupon announced it would be cutting 500 members of staff last week as part of its goal to focus on 'mission-critical' activities.
Groupon was founded in Chicago in 2008, operating as an online marketplace. The online marketplace decided to cut roughly 15 percent of its staff, 500 members, in an announcement last week. According to the business’s CEO, this will help generate positive cash flow by the end of CY22.
“Our overall business performance is not at the levels we anticipated, and we are taking decisive actions to improve our trajectory,” said Kedar Deshpande, the CEO of Groupon. The business made the call to lay off its staff so it could focus ‘only on mission-critical activities and leaning on more external support’.
Deshpande further explained that its cost structure and performance were ‘not aligned’. “In order to position Groupon to successfully execute our turnaround plan, we have to lower our cost structure,” he said. “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.”
Groupon reported global revenue of $153.2 million in its second quarter for FY22, down 42 percent from the previous year. It also reported a net loss of $90.3 million. “We are reiterating our target to deliver both a minimum of $100 million in free cash flow and an Adjusted EBITDA margin of 15-20 percent starting in 2023,” said Deshpande in a statement.
Groupon is also closing its Australian Goods operation, the statement read.
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