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Dow Jones Newswires: Groupon plans to slash costs, cut 500 jobs

Groupon Inc.
GRPN,
+8.19%

on Monday said it plans to remove about 500 positions and cut other costs to turn the business around.

Chief Executive Kedar Deshpande said in a letter to employees on Monday that the company’s cost structure and performance are not aligned.

As part of its turnaround strategy, Groupon plans to reduce its North America sales team and continue to scale its self-service merchant acquisition capabilities. Groupon is also planning to right-size its tech organization and close its Australia Goods business. The company will also rationalize its real estate footprint to reflect the needs of its hybrid work model.

Overall, Groupon expects to reduce costs by $150 million annually in the first phase, while incurring between $10 million and $20 million in restructuring costs. Groupon has a goal to identify another $50 million of savings by the end of next year.

The company said second-quarter revenue dropped 42% to $153.2 million. Loss per share was $3.04, compared with a loss of 12 cents a share a year ago.

After initially falling 8% in after-hours trading following the announcement, shares were last slightly in positive territory.

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