Along with shutting down its operations in seven countries, Groupon is laying off 1,100 people which amounts to about 10% of its workforce. This drastic measure has been taken to “better focus our resources and streamline international operations,” as stated by Rich Williams COO, Groupon, on the company’s official blog.
Countries from where Groupon is withdrawing its presence are -Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay.
Last month, Groupon shut its operations in Greece and Turkey. In April, the company said that it would sell a controlling stake in its South Korean business, mobile-commerce company Ticket Monster, for $360 million as part of its turnaround effort.
Groupon, like many tech companies with a big overseas presence, has been hit hard by the strong dollar. Markets outside North America generated about 43% of Groupon’s revenue in 2014, reports USToday.
Here’s an excerpt from the blog explaining the company’s move – “…we’ve also taken a close, honest look at where we do business. We saw that the investment required to bring our technology, tools and marketplace to every one of our 40+ countries isn’t commensurate with the return at this point. We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries. So, we decided to exit a number of countries where the required investment and market potential don’t align.”
Groupon which went public in November 2011, was started as a daily deals website for products and services. Notably, at that time, it was the largest initial public offering by a U.S. Internet company since Google. Moreover, Google had even offered a multi billion dollar buyout deal to Groupon, only to be rebuffed by the latter which held immense confidence to lead its own path as a publicly traded company.
Groupon’s shares tumbled about 50% this year alone. Company’s strategy can serve as a lesson to other affiliate deals sites operating online globally.Category Business