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."

Comments

Re:Should've taken Google's $6B offer

[Travis Mansbridge]

It's not so much that Groupon isn't useful, what they've always failed to do is convert the coupon users into repeat customers which frequently causes their clients to operate at a loss (making only the heavily-discounted deal and never cashing in on full-price sales).

Bingo !

[eulernet]

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."

Groupon "family"

[anti-pop-frustration]

but it’s not easy to lose some great members of the Groupon family

Detestable corporate jargon. Your employer is not your family.

Re:"We're stronger than ever"

[Z00L00K]

I still wonder why this became slashdot news. It's not for nerds, it's just about some marketing company selling all kinds of junk that is no different from what you get in any random outlet.

Yet another company that does not need to exist

[bradley13]

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.

Re:Yet another company that does not need to exist

[TheRaven64]

Businesses seem to have very varying success converting Groupon users to regular customers. Some try it once and fail. Others keep coming back because making a small loss on a few sales (and guaranteeing that those people actually do try your product / service) is much cheaper than most forms of advertising.

I don't have much sympathy for companies that don't do well out of Groupon. Your attitude seems to sum it up:

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.

And if you treat people like this, no wonder they never come back. Groupon gives you potential customers who are interested in the kind of thing that you're selling, willing to try buying it from you, and on your premises where you can try to convert them into repeat customers. If you can't persuade at least some of these people to come back regularly then that says a lot more about your customer service than it does about Groupon. What other form of advertising identifies people who are interested in your product or service and gets them to try yours as cheaply?

Your problem seems to be assuming that Groupon is a substitute for marketing, not a form of marketing. Do you also complain that people don't pay to click in banner ads or to look at your leaflets / posters?

As a regular Groupon consumer

[WinstonWolfIT]

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.

Re:"We're stronger than ever"

[LaurenCates]

Well, look at it like this: Groupon was at the forefront of a new business model, started because the internet enabled it. It wouldn't have worked as well by any other method of communication.

The part that nerds might be interested in is how the wind shifts as to the ways people connect and do business. Are people looking to get deals in real-time? What's the turnaround time on a web-only deal to get the best possible value? Can you get a group of random strangers (rather than a group of friends) to all hop on a deal at once? Can you look at the data to see where this strategy works best, and where it works worst? Can you develop an alternate business model for sparsely-populated areas to get good deals the way people can in cities?

There are always data to look at where money is involved. Always.

Re:Should've taken Google's $6B offer

[FlyHelicopters]

That is the problem with greed, some people don't know when enough is enough...

Lets say the founders had only 10% share of the company (after investors) when Google made that offer.

That works out to $600 million each.

But no, we're going to reject that because we're holding out for the billions and billions...

If I could cash out my business for $600 million (or heck, $60 million), I'd retire tomorrow and make spending time with my family my new "job".

I'd get a reasonable house out in the country, raise my kids, and enjoy life while I can.

Lord, what happens to people that cause them to turn that down?