Groupon redundancy special offer tips, shares plunge
Hordes of employees storm the exits
Groupon has disappointed expectations once again, driving its shares down nearly 17 per cent to an all-time low.
The daily deals bazaar posted revenues for the third quarter amounting less than its own estimates and well short of Wall Street’s already quite cautious expectations, despite getting a bump from a bunch of unused coupons.
The firm’s stock fell 17 per cent at one stage in after-hours trading following the results announcement, dropping to an all-time low of $3.25. It’s now sitting at $3.36, 14.29 per cent under yesterday’s close.
Groupon posted a net loss of $2.98m for the quarter, a lot less than the $54.2m it lost in the same quarter last year. Revenue was $568.6m - up 32 per cent from last year, but below the company forecast of $580m to $620m.
The company also announced a massive reduction in headcount, down to 11,866 from 12,820 in the previous quarter. Jason Child, Groupon’s chief financial officer, told the Wall Street Journal that the big cut in employees was down to the firm’s ability to automate some processes and workers resigning or retiring without being replaced. He said the majority of the losses were in Europe.
A number of top sales execs have left Groupon in the last few months, which doesn't look good for the firm.
Chief exec Andrew Mason said that a “solid performance in North America” didn’t help “continued challenges in Europe”.
However, he said that Groupon Goods was a second source of revenue for the firm that “customers clearly love”.
Groupon Goods is a service that sells discounted products like TVs and jewelry, putting it into direct competition with big etailers like Amazon.
Investors are likely worried that Groupon’s main business of selling coupons could be unsustainable and are worried that the new Goods product makes the firm a small new fish in a very big pond. ®