(GRPN) disclosed in a regulatory filing on Tuesday that it plans to cut about 1,100 jobs globally as part of a restructuring of its global operations.
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The job cuts – which will be primarily form Groupon’s customer service and sales teams – will result in pretax charges of as much as $35 million, including about $22 million to $24 million in the third quarter, according to a statement the company filed with the SEC.
Groupon officials said the cuts are due to a need to restructure worldwide operations and will be completed by September 2016.
“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”.
The company’s star has fallen significantly in the past five years, as it sought to rebrand itself as an e-commerce platform amid the decline of the daily-deal e-mail craze and growing competition. We saw that the investment required to bring our technology, tools and marketplace to every one of our 40+ countries isn’t commensurate with the return at this point.
Shares of Groupon fell slightly Tuesday morning.
Groupon, like many tech companies with a big overseas presence, has been hammered by the strong dollar.
Most of the company’s revenue comes from North America, with 27.6 percent from Europe, the Middle East and Africa, and 7.2 percent from the rest of the world.
Chicago-based Groupon, which began as a website offering daily deals for products and services, is facing slowing customer growth and is struggling to add higher-margin inventory.
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“I think the company is appropriately making adjustments to their business to ensure that they can maximize the efficiency of their efforts”, Forte said.
