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Groupon Is Closing Operations In 7 Countries, Laying Off 1,100
New submitter joesreviewss writes: Groupon is laying off about 10% of its workforce and is shutting down operations in seven countries. 1,100 people worldwide will be let go and the company will take a pre-tax charge of $35 million in the process. A Groupon statement reads in part: "Let’s be clear: these are tough actions to take, especially when we believe we’re stronger than ever. We’re doing all we can to make these transitions as easy as possible, but it’s not easy to lose some great members of the Groupon family. Yet just as our business has evolved from a largely hand-managed daily deal site to a true ecommerce technology platform, our operational model has to evolve. Evolution is hard, but it’s a necessary part of our journey. It’s also part of our DNA as a company and is one of the things that will help us realize our vision of creating the daily habit in local commerce."
This sounds like something Baghdad Bob would have said. Groupon is dying, just like *BSD. Kids, this is what happens when your business model sucks.
Sure, they'd have lost their autonomy, but they'd have been a multi-unicorn and cashed out instead of losing money rapidly as people figured out that Groupon isn't very useful and was more or less a fad.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
"You likely saw that we recently exited Greece and Turkey. We are also ceasing operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay."
I detected a Bullshit Bingo: https://en.wikipedia.org/wiki/...
Seriously, their business is to rip off small businesses.
Their service can only be used once, because even dumb businesses realize instantly that it doesn't attract regular customers.
"Fool me once, shame on you; fool me twice, shame on me."
Look at their website, their financial numbers say 135,000 active deal in North America, their website lists only about 9100.
It lists about 36k of discount goods, that's the new business where they try to compete with Overstock and Costco. Do a search for their warehouses, and see if this is a $1 billion revenue business as claimed shipping those goods.
http://files.shareholder.com/downloads/AMDA-E2NTR/756215013x0x809105/CAFFC80B-7D05-4C47-9B5B-2AA969163735/Groupon_4Q14_Earnings_Release.pdf
I know my views of Groupon, I view it like I viewed Wifi hotspot company GOWEX.
Now they're sacking 1100 people and yet claim to have $1.1 billion dollars in cash/cash equivalents and $253.4 million in gross profits, and $3 billion+ in revenue??
And meanwhile they're getting venture capital investments in India?? Why would they be doing that if they are sitting on so much cash?
Its all very very very odd.
but it’s not easy to lose some great members of the Groupon family
Detestable corporate jargon. Your employer is not your family.
Just how did a simplistic business like GroupOn ever come to have thousands of employees?
Our dealings with them were unpleasant, but at least short. GroupOn wanted us to offer insane discounts, i.e., for us to sell as a huge loss. We asked ourselves: what kind of customer is that going to attract? The answer is clear: extreme bargain seekers, who will never come back and pay our normal prices. No thanks, go away.
They are just another crappy coupon business, only "on a computer". Whoopie.
Enjoy life! This is not a dress rehearsal.
My partner and I over the past few years have regularly used Groupon as a loss leader introduction to many many many restaurants in the Melbourne Australia area. First off, with but an exceedingly rare exception, the restaurants have treated us as first class citizens. Groupons customers who report otherwise arrived with a chip on their shoulders which is unfortunate and ultimately not my problem. They're dicks and should be treated as such. Second, several businesses have converted us to regular customers. And, truthfully, some businesses are so overpriced, they've converted us to strictly loss leader customers. Businesses that fail to deliver value -- even if rent prices force them into it -- must fail. But Groupon overall provides what they strive to, and we'll continue to allow them to introduce us to new restaurants.
I'm sick of companies calling employees "family". Family are the people you can't get rid of to save money, no matter how damn much you want to. Instead of family, what they mean to say is "people who weren't insufferable, as long as they made us money."
is groupon?
Why is this news?
The web is full of ways to save money. People can easily search for the best prices. Eventually Groupon simply was just another tree in a forest.
QED
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
One restaurant I know, they use groupon to get people in their restaurant. They don't make a profit on groupon users, and groupon users don't come back. However the more people are in their restaurant, the more people want to come into the restaurant when they walk by and look how busy it is.
It's not worth sleeping with GroupOn to get that.
You can get the same effect pretty simply. All that's necessary is that you partition the restaurant, and open the partitions, as people need more space.
If GroupOn was willing to let you implement pool retention algorithms (reservation required for all GroupOn customers! Walk-Ins do *NOT* get to use the GroupOn coupon!), then you might have an argument for deep visibility interiours on restaurants. But the other alternative for that is: don't permit deep visibility; instead, lay out the restaurant correctly.
Isn't it wonderful!? All the old economy ideas like long-term debt and mortgages are still here, *they* never change.
But long-term employment? Oh no no, it's a new world out there! Scramble every few years for the latest faddish "digital economy" trend!! Keep learning! Keep changing!
Except the rich people, they can relax...
If they have that cash pile, then why are they seeking venture capital in India?
If they have 135,000 active offers in the US, why does their website show 9100?
Why is their shopping service a $1.7 billion dollar business even before they open the main warehouse in Hebron? Their press release says that, yet the financial one says a number 1/10th that.
Just look at the crap in their online store, and ask yourself if thats a major operation equal to 1/30th of Amazon in revenue?
It screams out dodgy!
Do a search "overstock warehouse", or "amazon warehouse" or "newegg warehouse" and you see pictures of giant warehouses filled with stuff with their logo.
Do a search "groupon warehouse" and you see an *amazon* warehouse as the only thing that looks like a big warehouse in those photos!
The only Groupon warehouse (Malaysia) in that list looks more like a tiny lockup:
https://everydayonsales-infomartglobal.netdna-ssl.com/wp-content/uploads/2015/03/Groupon-Warehouse-Sale-for-Online-Stock-Clearance-Malaysia-Jualan-Gudang-2015.jpeg
This does not smell right.
How the holy fucking fuck does Groupon have more than, like, ten employees?!?!?!??!?!?!??!
So you used groupon, attracted lots of customers you converted to regulars. So why would you now go back and re-use Groupon if they had regulars??
By the nature of the logic, the need to re-use groupon would say you didn't have regulars.
More to the point, if Groupons model worked why are they changing to be a Costco/Overstock clone??
Why would a store not simply offer discounts in flyers to locals! Instead of Groupon offers to non-locals. As it is, they don't even get the discount money, half goes to Groupon! Even the locals, they likely already use the store, so all you've done is lose their regular sale, and instill the idea that a regular sale is an overpriced sale!
Its goes against marketing, where you offer SMALL discounts to customers most likely to be REGULAR buyers, or BUY ONE GET ONE 50% OFF, where you increase the sales to them without devaluing your product.
People who can get a job anywhere would think twice about taking a job where lay offs are part of their DNA.
Groupon fucked over a lot of businesses, and then moved onto the next before their reputation caught up with them. It was a completely unsustainable model which explains why the original investors are long gone. Now their site mostly sells crummy service deals - 50% off eyebrow waxing, carpet cleaning etc. stuff where the the cost of the service is low or fixed so they can make up any bullshit figure and pretend to discount it. I'll be glad Groupon and its ilk die.
This retrenchment isn't a sign of defeat overall; mostly it's a withdrawal from some unsuccessful markets. Failure in a country could have been caused by a number of things: insufficient internet penetration and use, lack of understanding of the market, cultural resistance to couponing, or competition from a locally based alternative.
In the early days of Groupon there were some notable cases of businesses hurting themselves. The typical problem was a new business selling so many Groupons that they were unable to provide all the goods and services they promised, or were doomed to spending a couple of months selling everything at cost to fulfill them. That problem seems to have gone away now that people have a better idea of the strengths and weaknesses of Groupon. Some Kickstart campaigns have doomed themselves in the same way, promising goods at prices that turned out to be lower than the cost of producing and shipping them, let alone development and labor costs.
Groupon will still struggle because they are in a business that has a low cost of entry and that does not have a strong network effect. They have a number of competitors (LivingSocial and Gilt City are a couple) as well as some that have already come and gone. Buying a coupon from Groupon has no particular advantage to customers over buying a similar coupon from a competitor, so there is not an incentive for brand loyalty.
But there is a demand for their type of service. It's a useful promotional tool to attract new customers, and for restaurants, salons, etc. to fill slack times in their schedule. (Groupons often have restrictions that prevent using them at the busiest times, and the requirement for reservations also serves as a filter to push Groupon users to less busy parts of the schedule.) I believe they will be one of the survivors.