Become a fan of Slashdot on Facebook

 



Forgot your password?
typodupeerror
Check out the new SourceForge HTML5 internet speed test! No Flash necessary and runs on all devices. ×
Businesses

Groupon Is Closing Operations In 7 Countries, Laying Off 1,100 107

New submitter joesreviewss writes: Groupon is laying off about 10% of its workforce and is shutting down operations in seven countries. 1,100 people worldwide will be let go and the company will take a pre-tax charge of $35 million in the process. A Groupon statement reads in part: "Let’s be clear: these are tough actions to take, especially when we believe we’re stronger than ever. We’re doing all we can to make these transitions as easy as possible, but it’s not easy to lose some great members of the Groupon family. Yet just as our business has evolved from a largely hand-managed daily deal site to a true ecommerce technology platform, our operational model has to evolve. Evolution is hard, but it’s a necessary part of our journey. It’s also part of our DNA as a company and is one of the things that will help us realize our vision of creating the daily habit in local commerce."
This discussion has been archived. No new comments can be posted.

Groupon Is Closing Operations In 7 Countries, Laying Off 1,100

Comments Filter:
  • by Anonymous Coward

    This sounds like something Baghdad Bob would have said. Groupon is dying, just like *BSD. Kids, this is what happens when your business model sucks.

    • by Z00L00K ( 682162 ) on Wednesday September 23, 2015 @04:28AM (#50580893) Homepage

      I still wonder why this became slashdot news. It's not for nerds, it's just about some marketing company selling all kinds of junk that is no different from what you get in any random outlet.

      • by LaurenCates ( 3410445 ) on Wednesday September 23, 2015 @07:17AM (#50581329)

        Well, look at it like this: Groupon was at the forefront of a new business model, started because the internet enabled it. It wouldn't have worked as well by any other method of communication.

        The part that nerds might be interested in is how the wind shifts as to the ways people connect and do business. Are people looking to get deals in real-time? What's the turnaround time on a web-only deal to get the best possible value? Can you get a group of random strangers (rather than a group of friends) to all hop on a deal at once? Can you look at the data to see where this strategy works best, and where it works worst? Can you develop an alternate business model for sparsely-populated areas to get good deals the way people can in cities?

        There are always data to look at where money is involved. Always.

        • by Z00L00K ( 682162 )

          It mustn't have worked very well anyway because this article was the first time I did hear about their existence. The world and net is filled with mediocrity.

          • I would bet you are in the minority. I am not a coupon shopper and even I heard of them. Most of my coworkers and friends use it often.

            Maybe it is a class thing? These are coupons that we are talking about (and coupons that you have to buy to use.) My friends and I (well not me anymore) make around 40,000 or less - which is livable wage in Texas, but does not leave a lot of disposable income.

          • Every so often the company makes the news because some business made a really stupid offer that cost them a lot of money. It's kind of like those pricing errors on Amazon except it's intentional and they have to honour the offer.

        • by Anonymous Coward

          The idea was to get people to come to your business, and then come back. The reality is people use the coupon and then go on to the next coupon and never look back.

          Small businesses try groupon once, lose money, and the end.

        • The part that nerds might be interested in is how the wind shifts as to the ways people connect and do business.

          Interesting to the nerds who weren't around during the dot-com bubble of the late 1990s. Those of us who were around back then have seen this all before.

          Are people looking to get deals in real-time? What's the turnaround time on a web-only deal to get the best possible value? Can you get a group of random strangers (rather than a group of friends) to all hop on a deal at once? Can you look at th

      • it's just about some marketing company selling all kinds of junk that is no different from what you get in any random outlet.

        That's not obvious for everyone. And thanks to you, and your insightful modded post, more people are aware of the true nature of that news.

      • The actual news here is that GroupOn needed more than 10 persons to work.

        • by MarkvW ( 1037596 )

          Groupon needed WAY more than 10 people to work. You can't forget the salespeople. Groupon was all about getting businesses to sign on the bottom line . Without salespeople to sell the snake oil, it cannot succeed.

          • How is it snake oil? It does not pretend to be anything other than what it is. I have purchased a few groupons. As long as you are willing to plan ahead, you can save a lot of money using them - especially when it comes to restaurants, bowling, and car washes.

            • by zyzko ( 6739 )

              The snake oil part is where Groupon salesperson is selling the idea to the restaurant, bowling alley or carwash that they will get you as a valuable returning customer by offering you a good deal this one time.

            • by MarkvW ( 1037596 )

              It is not snake oil at all, as far as the customer goes. But Groupon's customer isn't the customer of the business. Groupon's customer is the business itself. Their salespeople must persuade the customer-business to (a) give Groupon money; and (b) give their customers discount coupons (at cost to themselves). That can be a very hard sell. That is why Groupon's salespeople are so extremely essential to its survival.

      • Because jobs at companies with heavy tech footprints (I assume at least some of those 1,100 layoffs will be of IT workers) is always interesting to us nerds.

        I just turned down a job offer at a publicly-traded tech "startup" that doesn't pay dividends and who's profitability fluctuates widely from quarter to quarter. Including the restricted stock portion of the compensation package, it would have been a big raise -- assuming both that the stock didn't tank too much and I stayed employed long enough for it t

        • by Z00L00K ( 682162 )

          By that measure every company is a heavy tech footprint company today.

          I don't see them as very special or leading in any perspective.

          • By that measure every company is a heavy tech footprint company today.

            Which is why it's still pretty good to be in IT. The same can be said for accountants and lawyers -- every company basically has to have some.

            I'm also assuming that, being primarily a website, Groupon has at least a slightly higher than average percent of tech workers. And they're a startup at least in the sense that they've never paid a dividend. Since there are so many web-basted startups that employ us nerds, news about Groupon and similar is relevant on slashdot.

            .

  • Sure, they'd have lost their autonomy, but they'd have been a multi-unicorn and cashed out instead of losing money rapidly as people figured out that Groupon isn't very useful and was more or less a fad.

    • by Travis Mansbridge ( 830557 ) on Wednesday September 23, 2015 @03:26AM (#50580757)
      It's not so much that Groupon isn't useful, what they've always failed to do is convert the coupon users into repeat customers which frequently causes their clients to operate at a loss (making only the heavily-discounted deal and never cashing in on full-price sales).
      • by gl4ss ( 559668 )

        well that is to say that their business model sucks.

        also, groupons business model was never about the actual customers. it was about selling to the companies that provided the stuff. with really, really heavy sales tactics and no regard to quality or if whoever provided the service could deliver. they would reimburse some of the cut price themselves too, to some, thus the high operating costs...

        but main cost was paying to sales people who would make deals with barbers etc that would swamp the barbers with m

        • The way I see it they had an awesome idea and ended up killing their own business by being too greedy. The barber example is perfect. Why not have the same barber sell 20 coupons every month for 2 years instead of selling 400 coupons in a single month, and not be able to fulfill them. The barber would be more able to actually meet the demand, and would be a repeat customer of Groupon, and would probably result in a few more repeat customers for the barber. They pushed businesses to sell more coupons th

        • like instead of selling 20 coupons they would sell 400. flooding the business with low profit clients who were angry for not being able to get an appointment.

          This would be the fault of the barber for offering to many coupons. A lot of deals where limited to 20 or so.
          You can also say it is the fault of the consumer for not checking the business before buying a groupon for that business. Groupon really is the middle man here.

      • SPAM has a conversion rate of 0.21%
        Search placement has a conversion rate of 0.22%
        Search advertising has a conversion rate of 0.04%

        GroupOn has a conversion rate down around that of search advertising; you're better off sending SPAM, hideous as that thought is...

      • by N1AK ( 864906 )

        It's not so much that Groupon isn't useful, what they've always failed to do is convert the coupon users into repeat customers which frequently causes their clients to operate at a loss

        What Groupon does is sell heavily discounted coupons, something that attracts the kind of customers who are least likely to become repeat customers; so for that purpose it is exactly that "Groupon isn't useful". Pretty much the only use for Groupon seems to be ueful for is to churn & burn customers on artificially discoun

      • It's not so much that Groupon isn't useful, what they've always failed to do is convert the coupon users into repeat customers which frequently causes their clients to operate at a loss (making only the heavily-discounted deal and never cashing in on full-price sales).
        Flag as Inappropriate

        Groupon can be quite useful to customers, but they aren't useful to vendors, who don't see their loss-leader offers turn into regular customers. And unless they're useful to both, it can't survive in the long run.

      • Groupon's business model involved giving horizon-level reports of 'deals' for consumers, who then helicopter in to the business offering the deal, get it, and swoop out, often never to return. Any idiot would figure this out quickly. It's the whole point of their business plan, from the POV of the consumer.

      • by DrXym ( 126579 )
        All that repeat customer bullshit was simply a lie to convince a small business to provide the same service on 1/4 of the the revenue. They also fucked over businesses in some cases by selling more vouchers than the business could ever possibly fulfil. All this was great for Groupon of course but terrible for the businesses.

        People who chase deals are by definition cheapskates. Once a business undermines its own value in the eyes of a customer they'll never pay full price again. In fact they'll never even

      • It's worth noting that after Groupon spurned Google's $6 billion offer, Google put together their own discount program [wikipedia.org]. And after a few years they shut it down. So even Google couldn't make it work.
      • by mjwx ( 966435 )

        It's not so much that Groupon isn't useful, what they've always failed to do is convert the coupon users into repeat customers which frequently causes their clients to operate at a loss (making only the heavily-discounted deal and never cashing in on full-price sales).

        Groupon gets plenty of repeat customers. What they've failed to do is get repeat suppliers because coupon users are causing a loss for the suppliers because they aren't returning. Businesses have finally realised that Groupon isn't a loss leader, it's just a loss and have pulled up sticks. Its less expensive for them to not offer anything on Groupon.

    • Sure, they'd have lost their autonomy, but they'd have been a multi-unicorn and cashed out instead of losing money rapidly as people figured out that Groupon isn't very useful and was more or less a fad.

      Google's buyout offer never would have gone through. Once Google did some due diligence they would have backed out of the deal.

    • by FlyHelicopters ( 1540845 ) on Wednesday September 23, 2015 @11:18AM (#50582921)

      That is the problem with greed, some people don't know when enough is enough...

      Lets say the founders had only 10% share of the company (after investors) when Google made that offer.

      That works out to $600 million each.

      But no, we're going to reject that because we're holding out for the billions and billions...

      If I could cash out my business for $600 million (or heck, $60 million), I'd retire tomorrow and make spending time with my family my new "job".

      I'd get a reasonable house out in the country, raise my kids, and enjoy life while I can.

      Lord, what happens to people that cause them to turn that down?

      • You used that word "reasonable". Most of those trying to build new-tech companies don't understand that word. Forced death-marches, forced cross-country relocations (move or lose your job), timelines that no one - even their competition - says you can meet. That's not reasonable. But it's all about the few founders and their attempt to break into the billionaire's club, employees and customers be damned...
    • What the fuck is a multi-unicorn?
      • It's a unicorn with multiple horns, obviously. Or it's a startup that hit multi-billion-dollar valuation, with or without any particularly good reason.

  • "You likely saw that we recently exited Greece and Turkey. We are also ceasing operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay."

  • Bingo ! (Score:5, Insightful)

    by eulernet ( 1132389 ) on Wednesday September 23, 2015 @04:04AM (#50580831)

    I detected a Bullshit Bingo: https://en.wikipedia.org/wiki/... [wikipedia.org]

    Seriously, their business is to rip off small businesses.
    Their service can only be used once, because even dumb businesses realize instantly that it doesn't attract regular customers.

    "Fool me once, shame on you; fool me twice, shame on me."

    • Well at least they can only fool a company once... Shame on both parties for even that.

    • Seriously, their business is to rip off small businesses.

      As opposed to what? You can't sell if no one's buying, and they can't buy if they don't have income. Wages have been in decline for decades now, so a company that doesn't rip off someone has little chance of success because your product, no matter how good, isn't more important than food. And small businesses typically have desperation, some remaining cash reserves to take, but not enough to put up a fight in court over misleading marketing, making t

      • I think you are too pessimistic.

        I don't really disagree with you, since it's obvious that money goes to people who already have money, and I see Apple making piles of cash, and keeping it to itself.
        At a given moment, the whole system will collapse, but is it really a bad thing ?

        I see the advertising model as a way to create a fake good reputation.
        It's easier to invent a good self-image and ignore what's wrong, and that's where Apple, Google and Facebook excel.

        Hey, you are starting to rub off on me !

  • Groupon "family" (Score:5, Insightful)

    by anti-pop-frustration ( 814358 ) on Wednesday September 23, 2015 @04:14AM (#50580855) Journal

    but it’s not easy to lose some great members of the Groupon family

    Detestable corporate jargon. Your employer is not your family.

    • by Anonymous Coward

      Yeah: "Sorry, son, we just can't afford to keep you in the family. Goodbye and good luck. Thankfully we still have two other children in our family."

    • but it’s not easy to lose some great members of the Groupon family

      Translation: I got mine. So long, sucker.

    • Satellite/remote/foreign offices are always referred to as family. It's been part of the parlance of our times for decades (I believe the Dude said that).

      Yeah, it's a bastardization of the word, but it is being properly used. I would say using "family" in this manner is more like getting married. Groupon basically divorced the office's in the countries/territory listed (and they probably owe a bit of alimony as part of the deal, certainly in Puerto Rico I would think).

  • by bradley13 ( 1118935 ) on Wednesday September 23, 2015 @04:53AM (#50580955) Homepage

    Just how did a simplistic business like GroupOn ever come to have thousands of employees?

    Our dealings with them were unpleasant, but at least short. GroupOn wanted us to offer insane discounts, i.e., for us to sell as a huge loss. We asked ourselves: what kind of customer is that going to attract? The answer is clear: extreme bargain seekers, who will never come back and pay our normal prices. No thanks, go away.

    They are just another crappy coupon business, only "on a computer". Whoopie.

    • by Kardos ( 1348077 )

      > Just how did a simplistic business like GroupOn ever come to have thousands of employees?

      For the same reason multi-level marketing companies persist, despite being a terrible deal. They keep finding businesses who buy into their marketing and take a big loss for a vague promise of increased future profits.

    • by TheRaven64 ( 641858 ) on Wednesday September 23, 2015 @05:23AM (#50581037) Journal

      Businesses seem to have very varying success converting Groupon users to regular customers. Some try it once and fail. Others keep coming back because making a small loss on a few sales (and guaranteeing that those people actually do try your product / service) is much cheaper than most forms of advertising.

      I don't have much sympathy for companies that don't do well out of Groupon. Your attitude seems to sum it up:

      We asked ourselves: what kind of customer is that going to attract? The answer is clear: extreme bargain seekers, who will never come back and pay our normal prices. No thanks, go away.

      And if you treat people like this, no wonder they never come back. Groupon gives you potential customers who are interested in the kind of thing that you're selling, willing to try buying it from you, and on your premises where you can try to convert them into repeat customers. If you can't persuade at least some of these people to come back regularly then that says a lot more about your customer service than it does about Groupon. What other form of advertising identifies people who are interested in your product or service and gets them to try yours as cheaply?

      Your problem seems to be assuming that Groupon is a substitute for marketing, not a form of marketing. Do you also complain that people don't pay to click in banner ads or to look at your leaflets / posters?

      • And if you treat people like this, no wonder they never come back. Groupon gives you potential customers who are interested in the kind of thing that you're selling, willing to try buying it from you, and on your premises where you can try to convert them into repeat customers. If you can't persuade at least some of these people to come back regularly then that says a lot more about your customer service than it does about Groupon.

        Wrong.

        What Groupon primarily attracts is cheapskates. People who are only interested in the lowest price and then move on. Belligerent assholes who come into your business with an coupon they know has expired and then scream at you for not honoring it. This is well documented by the many businesses who have lost money on the Groupon scam.

        • by crgrace ( 220738 )

          What Groupon primarily attracts is cheapskates. People who are only interested in the lowest price and then move on. Belligerent assholes who come into your business with an coupon they know has expired and then scream at you for not honoring it. This is well documented by the many businesses who have lost money on the Groupon scam.

          That may be one kind of customer but my wife and I used Groupon to have new experiences we otherwise never would have tried.

          For example, we used Groupons to get an archery lesson, to take a massage class, to stay in a Victorian mansion turned B&B, and to take guided kayak tour of a local slough.

          The businesses *might* have made money on us (I have no idea about their cost structures) but without Groupon they never would have seen us as customers because a full-price archery lesson (for example) wouldn't

          • And did you go back to any of those?

            But if only would have went to the archery lesson because of Groupon and are never going back then you have just proved the original commenters point.

          • But the point is, did you ever have another archery lesson, massage class, stay in that Victorian mansion or guided kayak tour?

            If not, you have verified the uselessness of Groupon for businesses.

      • If you can't persuade at least some of these people to come back regularly then that says a lot more about your customer service than it does about Groupon.

        Actually, it says a lot about other things, too.

        First, the business owner sets the terms of the groupon. Groupon salesdicks were known for trying to get you to set really ridiculous terms to increase coupon uptake, but if you have a spine you can say no. So the first thing the story suggests is that they lack a spine, because they complained about how groupons only attract cheapskates. But if you only give a relatively small discount which you can afford to give, and use it as advertising to get people in t

      • Considering that Groupon is crumbling and the likelihood that GP's business is not laying off/scraping a similar portion of their company than I can safely say that GP is making sound choices and your assumptions about their attitude towards attracting coupon scroungers is off. Carry on.
        • Considering that Groupon is crumbling

          Is it? I take it that you haven't looked at their most recent financial statement...

    • Google, before it became an Alphabet [abc.xyz] soup of companies, was also a simplistic, if not more simplistic business. You type a word in a input box, and Google returns a result flavored by an advert. Problem isn't if the site has a simplistic business but if it has a useful function not done better or more conveniently elsewhere. Lots of things are getting automated, so maybe this is just another example of the jobless recovery we've been hearing much lately.
  • by WinstonWolfIT ( 1550079 ) on Wednesday September 23, 2015 @05:02AM (#50580983)

    My partner and I over the past few years have regularly used Groupon as a loss leader introduction to many many many restaurants in the Melbourne Australia area. First off, with but an exceedingly rare exception, the restaurants have treated us as first class citizens. Groupons customers who report otherwise arrived with a chip on their shoulders which is unfortunate and ultimately not my problem. They're dicks and should be treated as such. Second, several businesses have converted us to regular customers. And, truthfully, some businesses are so overpriced, they've converted us to strictly loss leader customers. Businesses that fail to deliver value -- even if rent prices force them into it -- must fail. But Groupon overall provides what they strive to, and we'll continue to allow them to introduce us to new restaurants.

    • by N1AK ( 864906 )

      First off, with but an exceedingly rare exception, the restaurants have treated us as first class citizens. Groupons customers who report otherwise arrived with a chip on their shoulders which is unfortunate and ultimately not my problem.

      Because anyone whose experience doesn't match your own must have some form of problem. Self-absorbed much?

    • Second, several businesses have converted us to regular customers.

      I think you must be an exception. If there really are so many converted customers then the merchant satisfaction levels should be quite high. The only site saying they are high is groupon's own website pointing to groupon funded studies or groupon's own data.

      By comparison a search around google will find many studies done on merchant satisfaction. The best I found was 37% of business said they would not work with them again, the worst was close to 66%. You can't dissatisfy that percentage of your market and

  • by umghhh ( 965931 )
    is groupon?
    Why is this news?
  • by vikingpower ( 768921 ) on Wednesday September 23, 2015 @05:43AM (#50581093) Homepage Journal
    QED
  • Groupon fucked over a lot of businesses, and then moved onto the next before their reputation caught up with them. It was a completely unsustainable model which explains why the original investors are long gone. Now their site mostly sells crummy service deals - 50% off eyebrow waxing, carpet cleaning etc. stuff where the the cost of the service is low or fixed so they can make up any bullshit figure and pretend to discount it. I'll be glad Groupon and its ilk die.
  • This retrenchment isn't a sign of defeat overall; mostly it's a withdrawal from some unsuccessful markets. Failure in a country could have been caused by a number of things: insufficient internet penetration and use, lack of understanding of the market, cultural resistance to couponing, or competition from a locally based alternative.

    In the early days of Groupon there were some notable cases of businesses hurting themselves. The typical problem was a new business selling so many Groupons that they were unab

We can found no scientific discipline, nor a healthy profession on the technical mistakes of the Department of Defense and IBM. -- Edsger Dijkstra

Working...