• by Erik Sass , Staff Writer @eriksass1, November 7, 2014

Social commerce isn’t going away anytime soon, but building businesses based on it has been much more difficult than expected, judging by the travails of some leading companies. In the most recent development, daily deals platform LivingSocial revealed Thursday that it is laying off 400 employees, or about 20% of its total workforce of 2,000, as well as closing an office in Torrance, CA.

These cuts come on top of previous layoffs and divestitures that have reduced the company’s headcount by half, according to The Washington Post. At its peak back in 2011 LivingSocial employed over 4,000 people worldwide; when the latest round of layoffs is complete that will be down to around 1,600, for a 60% decrease in three years.

CEO Gautam Thakar, a former eBay exec who took over the top spot from Tim O’Shaughessy in July, announced the layoffs in an email to staff, reading in part: “This is a painful decision, especially given our strong cash position, but one that I feel needs to be made to ensure that we enter 2015 with more focus. This will mean a reduction of investment in some areas of our business, and a reshaping of how we operate.”

Thakar went on: “It is clear that we have lacked focus in an industry where growth has flattened. You have heard me use the term ‘refocus’ to talk about what lies ahead. Simply put, there are many elements of our core business that have real value – our customer base, quality merchants, our cash position, and our people. Now is the time to refocus on those assets and invest in areas where we can win.”

LivingSocial’s archrival Groupon has also had its share of well-documented troubles, but recently its fortunes seem to be improving. Earlier this week Groupon announced that total revenues jumped 27% to $757 million in the third quarter of this year, while total billings rose 39%. The company attributed this to the growth of its mobile platform and renewed focus on local businesses, among other factors. It is also focused on increasing profit margins for goods sales.