LivingSocial To Cut Staff
Throwing more cold water on what was once a white-hot daily deal space, LivingSocial is reportedly ready to cut about 10% of its workforce, or as many 400 jobs.
“For the 5-year-old social commerce company, the long-rumored layoffs reflect a struggle to stabilize itself financially after a frenzied headcount expansion in 2011,” the Washington Business Journal reports.
“The layoff shouldn’t come as much of a surprise following Amazon’s third-quarter earnings report, which blamed its $169 million loss on its stake in LivingSocial,” writes Mashable. “Amazon invested $175 million in the daily deal site two years ago.”
“The daily deals world is awash in financial woes, and LivingSocial is no exception,” according to CNet. “After a net loss of $566 million in the third quarter, the company is now reportedly about to cut jobs.”
As Forbes notes, “The news comes on a day when the company’s chief rival, Groupon, is reportedly holding a board meeting to discuss whether or not the struggling company should replace co-founder and CEO Andrew Mason.”
Connecting the dots, Business Insider recalls: “Earlier this month, Groupon eliminated 648 jobs prior to announcing quarterly revenues that missed expectations.”
LivingSocial, which has raised more than $800 million in funding, entered 2012 with a staff of roughly 5,000, according to the Washington Business Journal.
Regarding LivingSocial, The Washington Post writes: “It has not yet turned a profit and has since pulled out of some international markets and has sought to diversify its business by selling vacation getaways and everyday consumer goods, with mixed results.”