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A Message from our CEO Kedar Deshpande

August 8, 2022

Groupon CEO Kedar Deshpande shared the below update to Groupon employees on plans to streamline the company’s cost structure

Team, 

I’m writing to you with some tough news. Later today, we will publicly be announcing a plan to streamline our cost structure, which will include our proposal to remove approximately 500 positions globally. While we have discussed the need to streamline our organization as part of our strategy to transform Groupon into the destination for Local experiences and services, I recognize that saying goodbye to colleagues will hit us all harder than any words on a piece of paper ever can.

We’ve done an intensive analysis of our organization and business structure, and the actions we are announcing today were not undertaken lightly. The impact will be felt primarily across our Technology organization, North America Sales and our Australian Goods business.  

Today’s news will be difficult to digest no matter how it’s presented, but I want to share as much as I can about why we are taking these actions.

Put simply, our cost structure and our performance are not aligned. In order to position Groupon to successfully execute our turnaround plan, we have to lower our cost structure.  Over the last three months the senior leadership team has been challenging our current processes and automating how we work, both with an eye toward taking costs out of the business and improving our productivity.  As a result, we are announcing the following actions to:

• Reduce our North America sales team and continue to scale our self-service merchant acquisition capabilities. As we transition to a self-service led sales organization, we expect to be able to onboard and manage inventory and continue to drive efficiencies for our merchant partners.
• Put forward a proposal to re-organise and align the size of our tech organization to our business needs, by focusing our resources only on mission-critical activities and leaning more on external support.  As part of this work, we will also be exploring opportunities to leverage engineering centers of excellence to increase efficiency and productivity. In addition, we are proposing to reduce cloud infrastructure and support functions as we wrap up cloud migrations. 
• Close our Australia Goods business, which runs on a different platform than the rest of the Goods business making it too costly and complex to manage on an ongoing basis. 
• Rationalize our real estate footprint to reflect the needs of our new hybrid work model. 

The vast majority of these cost actions would happen this year. Going forward, we’ll continue to look at ways to optimize, like leaning into automation and streamlining our tech platform, two areas we’ve made significant progress in over the last three months as teammates stepped up and challenged our current processes. We will also continue to review our cost structure in other areas and ensure it’s aligned with the size of our current business, while still giving us room to grow.  

To those impacted by today’s news

For those of you whose roles are impacted today, we’re sincerely grateful for all of the contributions that you have made and want to do our best to support your success in the next steps of your career. For certain employees in International, you will be notified of our proposed changes and will enter into a consultation phase over the coming days and weeks.

Where possible, we will be giving departing employees the option to keep their laptops, offer outplacement services as an additional resource, and where legally permitted, provide the opportunity to submit their information into a Groupon Talent List that we will be sharing on LinkedIn. We will be notifying affected employees directly throughout the day today, some we are asking to stay on for a period of time to assist with the transition.  All impacted employees will receive information from HR regarding severance and other details on benefits to support you over the next weeks and months. 

Looking Ahead

I joined Groupon because I truly believe that our marketplace is special: a place that helps people create core memories and forge new connections that can last a lifetime. Today, my conviction that the Groupon marketplace can become the destination for local experiences and services is as strong as ever. We are well positioned to transform our company and we are laying the foundation for growth. Together, we can create a fundamentally better experience for our customers and merchants.

We’ll continue to discuss today’s actions and our transformation in the coming days. Your STeam leaders will also be bringing their orgs together to host short, informal town halls over the next few days. 

Thank you for your continued commitment to Groupon. 

Kedar Deshpande

CEO