Living Social group deal company cuts 400 jobs
Online deals firm Living Social said Thursday it was cutting 400 jobs, or 10 percent of its staff, in a retrenchment which follows big losses for the company.
Company spokesman Andrew Weinstein said in an email that most of the jobs were US-based by that “a couple dozen” positions were in international locations.
“After two years of hyper-growth from 450 to more than 4500 employees, these moves will align our cost structure against our 2013 plans and will help us set the company on a path for long-term growth and profitability,” the statement said.
“Specifically, they will us to allow us to invest more in critical priorities like marketing, mobile, and the hiring of additional technology staff.”
Washington-based Living Social has been under pressure along with its larger rival, Groupon, as consumers show fatigue over online deals offers.
The firms aim to make money by selling members deals for discounts on activities, items or services and then splitting the money with the businesses involved.
Both firms have been seeking to diversify, but have been struggling to become profitable.
Amazon, which owns a stake in LivingSocial reported a writedown of $169 million recently on that investment under accounting rules requiring a charge against earnings to reflect the lower estimated value of the company.
LivingSocal has deferred talk of a public offering.
Groupon shares have slid some 80 perent since its IPO last year.