Groupon to exit PH amid global restructuring
Online deals giant Groupon said Tuesday it was cutting some 1,100 jobs over the coming months in another sign of cooling in the once-hot sector.
Groupon also said it would be ending operations in several markets around the world including Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay, following recent exits from Greece and Turkey.
The streamlining aims “to realize the efficiencies we’ve been working so hard to gain, to further improve the way we operate around the world and -- most importantly -- continue to channel more and more of our resources toward long-term growth,” chief operating officer Rich Williams said in a blog post.
“Practically, this means we’re taking some broad restructuring actions to better focus our resources and streamline our international operations,” he said.
The company will eliminate some 1,100 positions, primarily in international operations, mostly in online deals and customer service, Williams said.
The cuts, which represent about 10 percent of the workforce at Chicago-based Groupon, will result in pretax charges of as much as $35 million, including about $22 million to $24 million in the third quarter. Most charges will relate to employee severance and compensation benefits and will be paid in cash, Groupon said Tuesday.
Though Groupon makes more than 35 percent of its sales outside of North America, the company has struggled to compete with local competitors in too many countries, lacking necessary investment to drive growth and transform itself into a broader e-commerce site.
The company began exploring strategic options for some of its overseas properties a year ago. This April, Groupon sold a controlling stake in South Korean e-commerce site Ticket Monster to investment firm KKR & Co. and Hong Kong-based Anchor Equity Partners, for $360 million. Though last month, venture capital fund Sequoia India agreed to invest in Groupon India.
The restructuring could mean the company was unable to sell some businesses in the countries it’s leaving, said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc., who recommends buying the stock.
Groupon will have about 9,800 employees after the cuts, Bill Roberts, a spokesman for the company, said in an e-mail.
Groupon went public in 2011 amid enthusiasm over its model of offering deals on a variety of products and services. But its stock price has slumped more than 75 percent from its offering price of $20, and has been hovering around $4 in recent weeks. With AFP, Bloomberg