Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

I&#x27;ll be honest, I know Groupon and its ilk are terrible business, but as a user of the service I&#x27;ve had lots of fun exploring activities and restaurants that I literally would never have bothered with or known about. In the last few weeks I&#x27;ve taken a Scuba lesson, a Horse Riding lesson, an intro to art class, found a couple new amazing sandwich shops. I took an amazing trip to Ireland for something like 50% off the lowest rate we could find, and it forced us to explore virtually the entire country since the package had us in different castles every couple nights. I&#x27;ve visited some oddball museums I hadn&#x27;t bothered with before.<p>I would have probably not done almost any of these things, or been more judicious in what I went to. I&#x27;ve found some new things that I&#x27;ll be returning to, and some things that I won&#x27;t.<p>As a customer, these kinds of services are amazing. And really all they&#x27;re doing is centralizing good deals. A less &quot;grow fast and explode like a Unicorn&quot; business model would probably make it work better for participating businesses.

Anyone getting their emails has known it was coming for a long time. They used up all the good places pretty quickly - they got the return customers and didn&#x27;t need to re-run coupons. Now it&#x27;s all weight loss scams, online courses &quot;worth&quot; $2k but sold for $20, and even sex toys lately.

Looks like businesses have collectively realised that groupon is a miserable deal and it&#x27;s finally caught up with them, after having been running on fumes [1] for a couple years now.<p>[1] <a href="http:&#x2F;&#x2F;blog.bodellconsulting.com&#x2F;2013&#x2F;03&#x2F;01&#x2F;groupon-a-bad-deal-for-restaurants-and-everyone-else-including-groupon&#x2F;" rel="nofollow">http:&#x2F;&#x2F;blog.bodellconsulting.com&#x2F;2013&#x2F;03&#x2F;01&#x2F;groupon-a-bad-de...</a>

This article doesn&#x27;t tell the whole story. As a user of Groupon Panama, I can tell you that they face stiff competition here from a Groupon clone, ofertasimple. I think they&#x27;re exiting because it was a small market to begin with and they haven&#x27;t been able to win it. Many people, including myself, find the competing service superior.

&gt; &quot;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.&quot;<p>Did this company spokesperson just pass first year business writing? It&#x27;s like the writing prompt was, &quot;Your company is downsizing, what is the most absurd way you can describe it?&quot; I couldn&#x27;t help but laugh at the sentence.

Interesting when taken in the context of yesterday&#x27;s Unit Economics post.<p><a href="http:&#x2F;&#x2F;blog.samaltman.com&#x2F;unit-economics" rel="nofollow">http:&#x2F;&#x2F;blog.samaltman.com&#x2F;unit-economics</a><p><i>I have never seen Silicon Valley so willing to invest in companies that have well-understood financials showing they will probably always lose money.</i>

Anyone else notice they refer to Puerto Rico as &quot;international&quot;? Fun Fact 1: It&#x27;s a US territory, where residents are US citizens but can&#x27;t vote for president. Fun Fact 2: Journalists these days ain&#x27;t what they used to be.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Puerto_Rico" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Puerto_Rico</a>

The deals I saw, felt rather crazy to me.<p>A friend of mine paid 100€ for 100 pizzas, one every day. Also 100€ for 100 pasta dishes.<p>The idea seemed to be, that the service could plan ahead, because he knew months before how much ingredients to buy.<p>The delivery service who offered this deals closed down after a month, so in the end every meal did cost my friend about ~3€, which isn&#x27;t bad.

I feel very similar to this blog post I read a few years ago, calling the Groupon era &quot;The Locust Economy&quot;.. It wasn&#x27;t good for businesses, consumers logically just abused the mechanism until these companies were ruined..<p><a href="http:&#x2F;&#x2F;www.ribbonfarm.com&#x2F;2013&#x2F;04&#x2F;03&#x2F;the-locust-economy&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.ribbonfarm.com&#x2F;2013&#x2F;04&#x2F;03&#x2F;the-locust-economy&#x2F;</a><p><pre><code> Thinking about locusts and the behavior of customers around services like Groupon, I’ve become convinced that the phrase “sharing economy” is mostly a case of putting lipstick on a pig. What we have here is a locust economy.</code></pre>

Sad for a startup that showed great promise. How&#x27;s LivingSocial doing?

I&#x27;ve never heard of this negative reaction to Groupon like you folks are describing. What was the negative side? Was it not a good advertising investment for companies? Were expectations not being set correctly by Groupon? Do they take too much of a cut? Are they just jerks to the companies?<p>Is there room in this space to not be a shitty actor?

Even if it was a good deal, who has room in their life for the 1046-th marketing gimmick?<p>Please, interweb geniuses, think of something better.

Have any of the groupon competitors reached critical mass? I realize that a large number of &quot;me-too&quot; competitors were started when Groupon exploded, but it seems to me a &quot;groupon that doesn&#x27;t suck&quot; could be a pretty good business.

That&#x27;s a long fall from Google practically begging them to take fat stacks of cash.

Will Groupon founder Brad Keywell&#x27;s newer venture, Uptake, face a similar outcome? A recent Forbes article suggests he&#x27;s better at starting a company than running it.

1,100 ? On what did they all work?

At first I thought this was bad news for Groupon, but after reading about it, it seems like a logical strategy. Groupon recently exited Turkey and Greece, which makes a lot of sense considering the economic turmoil in those countries and in the region in general. The 7 countries that were affected in this news were fairly small markets. Since when was Uruguay a major player in the global economy? The layoffs of 1100 mostly in sales and customer service seems reasonable when operations in 7 countries are shut down. Groupon has over 10,000 employees. A 10% reduction in staff trims some of the low performers. Microsoft and Amazon probably cut more staff each year with their stack rankings. (I know MS supposedly killed off their stack rankings, but I have a feeling it still exists albeit in a less visible capacity.) Overall, I think these moves make Groupon stronger, more competitive, more focused and more capable in a cutthroat market.

Half of Groupon&#x27;s failure is the email spam model, another half is the business partners. If you signed up for a service where you give discounts and got any less than a shining smiling face when I come in with one, guess what - I&#x27;m not coming back to you. Groupon should have screened businesses the same way Apple screens apps, very carefully.

I feel like the small business man or woman was hurt the most by groupon, whether it be the mom pop shop or the family owned franchise. And when you exploit them, you hurt America basically. And that isn&#x27;t a biz model that people can get behind. Had groupon done things differently, we&#x27;d be reading a very different article today.

A good article to read and reflect on - From 5 years ago.<p><a href="http:&#x2F;&#x2F;www.newyorker.com&#x2F;magazine&#x2F;2010&#x2F;12&#x2F;20&#x2F;groupon-clipping" rel="nofollow">http:&#x2F;&#x2F;www.newyorker.com&#x2F;magazine&#x2F;2010&#x2F;12&#x2F;20&#x2F;groupon-clippin...</a><p>Some points that caught my attention (edited by me)<p>...Groupon’s got a healthy business. Almost forty million people, in more than a hundred and fifty cities around the world, have signed up for its e-mails,...Groupon isn’t going away. Unlike many Web companies, it’s been profitable from the start. (It takes fifty per cent of the revenue in every deal.) This year, it had half a billion dollars in sales, and estimates are that, before long, it could have as much as two billion dollars in revenue.&quot; End of my edits.<p>India, where groupon is hugely popular, has behaved like a spin-off. It recently independently raised 20MM from Sequoia.

Good.<p>I got on their mailing list through a permutation generator on names&#x2F;emails and it took me months to get off that craplist.

I&#x27;ve had in a hand in a few Groupon&#x2F;daily deal campaigns for some clients and their experiences all seemed to depend on the quality of the product&#x2F;service they could provide. An established restaurant I would find it hard to believe they would extract value out of this type of discount. However, a new product to market that believes a customer can have a good enough experience and can deliver on that the first time they try it out, may be more apt to succeed on daily deal type of sites. It follows the &quot;free trial&quot; model of direct response (without the shady autobilling on the backend), just get the product in their hands and let it do the talking for you.<p>As a consumer, I love the model. As a business owner&#x2F;marketer, the results have been so&#x2F;so.

Wondered when that was going to happen. Don&#x27;t get me wrong, I liked the concept but when you don&#x27;t get repeat business because the structure is so bad it&#x27;s just not a good sign.<p>At least they sold high...wait...

What is the significance of this line? &quot;taking a pre-tax charge of $35 million in the process&quot; It cost them 35 million to lay off 1,100 folks? They are getting a tax cut?

So on what contract were these 1100 people employed? 0 hours guaranteed, get in and get paid for the hours you work and your contract can be terminated any day? It always baffles me to see a thousand(s) of people getting laid of with the flick of a finger. That&#x27;s like an equal amount of people added to the economy unemployed, right now.

With this announcement coming shortly after the OrderUp acquisition I wonder if this is signaling a larger shift at Groupon.

I&#x27;m not terribly surprised. I stopped using Groupon 3-4 years ago after a couple of bad experiences, watching the CEO in an interview on TV and also learning about how some small businesses were negatively affected.<p>I think there is a class of business ideas that may seem good in the beginning but eventually fail for various reasons.

Much to my surprise, I&#x27;ve found Groupon to feature killer deals for discounted refurbished phones, tablets, etc. I&#x27;ve gotten a 32GB Nexus 7 (2nd gen) LTE for $200 , they have a Samsung S5 right now for $270 (but check reviews, caveat emptor etc).

Sometimes you dont see the flaws in a business idea until it is practiced for a while. In Groupons case it was an idea to easy to copy and businesses who though they were get a short deal. I thought it was worthwhile to try out.

It is just a badly ran business. The Chinese version of Groupon is ran by the very competent Xing WANG, who was a physics graduate student. And last time I looked at it Meituan was worth $15B.

some quotes from the snake oil salesman<p>Groupon May Be Fastest-Growing Company Ever<p><a href="http:&#x2F;&#x2F;www.cnbc.com&#x2F;id&#x2F;40454493" rel="nofollow">http:&#x2F;&#x2F;www.cnbc.com&#x2F;id&#x2F;40454493</a><p>Groupon is going to be wildly profitable.<p>-Eric Lefkofsky<p><a href="http:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2011-06-05&#x2F;groupon-chairman-lefkofsky-says-coupon-company-will-be-wildly-profitable-" rel="nofollow">http:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2011-06-05&#x2F;groupon-ch...</a><p>Is Andrew Mason still a YC part-time partner?

Good.