Groupon’s Berlin base is undergoing a “restructuring” that involves its marketing department being pruned back, with as many as 100 jobs reportedly to be slashed at the company. Alex Hofmann reports…
Go to Dublin or go home?
US discount portal Groupon‘s latest figures seemed hopeful after its post-IPO flagging: in the first quarter of this year, sales had risen to $601.4m from $559.3m in the same period last year. But examine the numbers more closely, and we see that this growth mainly comes from North America. In recent months, however, the company has repeatedly failed with its business model. Most significantly, the international business saw an 18 per cent drop in sales on the previous year, from $321m to $262m.
Groupon is seemingly trying to respond to this development, attempting to make significant cost savings – which includes the Groupon Berlin office. Up to 100 jobs could be affected by a “restructuring” in the German base. If you believe the rumours, staff were given the option to change their location to Groupon offices in Dublin, although it’s fair to assume that Groupon would anticipate very few of its Berlin staff accepting this offer. In effect then, the Berlin offices have been dealt a significant blow – calling into question the potential for European growth with the Groupon model.
Groupon has remained evasive, with a spokesperson telling us: “As a global company we are always striving to find ways to simplify complex processes through greater efficiency. This simplification allows us to better focus on our key projects to offer a unique customer service – wherever Groupon is represented. We are and will continue to appreciate the German market and are looking for talented individuals in the future.” [translated from German]
Difficult Samwer heritage
Mid-2012 saw Groupon open its opulent offices in Berlin Mitte with about 850 employees and space for more, but since then the tide has turned. Originally bought over from Rocket Internet and Holtzbrinck Ventures’ MyCityDeals, the Berlin Groupon base became a European stronghold for the company, but the past few months showed signs that there were difficulties this side of the Atlantic.
The Samwer brothers themselves had long since departed from the bargain site. About a year ago Marc Samwer left the company as head of international business, while original cofounder Daniel Glasner and CEO and International VP Philip Magin jumped ship shortly after reports of questionable business methods. There are no current numbers for the German business, but while the number of active customers increased in North America within three months by a 1m to 18.2 million, the international numbers shrunk by 300,000 to 23.5 million.
Groupon, which proclaims “from 0 to more than 10,000 employees in three years,” fired CEO and co-founder Andrew Mason a few weeks ago, after massively disappointing post-IPO results, losing three quarters of its market value. Provisionally co-founders Eric Lefkofsky and Ted Leonsis took back the helm, and stock has already risen by 28 per cent. With the current reductions in staff numbers, perhaps Groupon Europe will see results in the coming quarter – if the business doesn’t collapse any more than it can make up for the cost savings.
The original article was published in Gruenderszene.
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