17. February 2012–
In a frantic plea sent to Vertical Media yesterday at 1:32pm, a senior Groupon manager issued several attacks against the coupon franchise along with the leak of two internal emails from Groupon’s Eastern European CEO Daniel Glasner (the last of which was sent just hours before the insider reached out).
VentureVillage has since received an official statement from Glasner, reporting that the complaints “in no manner mirror the daily working routine at Groupon.” The emails appear to have been written by Glasner, and both are addressed to the same recipients: namely, four city managers and and their responsible overseer, also a Groupon CEO. Glasner did not deny the source.
The whistleblower begins his email by describing the dire situation immediately ahead. Unless he and his colleagues are able to reach unfeasible demands by the end of Friday (today), their titles are at risk, he reports.
The email begins on behalf of the threatened individuals (all quoted emails are translated from German):
I must remain anonymous otherwise I will face serious issues. Here I send you something that has bothered us for days, weeks, months, on a regular daily basis at Groupon. Strong pressure, breaches of contractually agreed bonuses with subsequent penalties. Now our titles are supposed to be changed – we will be degraded – if we do not acquire our Dreamlist partners.
The leaked email calls Groupon CEOs ‘slavedrivers’
The “Dreamlist” is a term that the sender mentions several times, referring to specific and reportedly unrealistic demands on the cc’d individuals (all city managers) to acquire high-tier clients (restauraunts, spas, etc) or otherwise face irreparable consequences. Issuing these demands are two senior Groupon executives, whose expertise the sender directly targets:
Phillip Magin and Daniel Glasner have zero experience in Sales, and behave like slavedrivers.
The sender then goes on to confess that he and the majority of his colleagues are searching for jobs elsewhere due to the substandard work conditions. The threat of a damaged reputation gives cause for hesitation. The sender explains:
How does it look if you were formerly at McKinsey and now you are degraded and your work experience certificate is tainted?
The positions of several Groupon managers are under threat
The remainder of the message goes on to include two group emails sent to a set of top-level Groupon managers by Daniel Glasner (Groupon’s CEO of Eastern Europe, CityDeal co-founder, and as it turns out, a McKinsey graduate himself).
Glasner’s February 9th email begins with a threat to the Groupon city managers cc’ed:
This topic is incredibly important. The meaning of this cannot not be underestimated. In order to properly illustrate the meaning and importance of the quality of [Groupon’s] deals, I’m going to take an extraordinary measure. Anyone of you who does not achieve the following two goals in the next week will lose his “Director” title.
Glasner then specifies the expectations, namely that:
[…]1/3 of the deal targets are reached, and that 50% of “Dreamlist” clients are acquired […]
He then goes on to request of a national manager the weekly KPIs of all city managers and that those who have not achieved their targets “report” to a particular senior figure (who we will keep unnamed). Most shockingly, Glasner directly threatens the titles of those city managers cc’ed. Preparing for unmet expectations, Glasner requests of the senior figure “the title change for the included individuals ready for reformulation of contracts”.
The second email, sent exactly a week later, confirms demands
In the second email Glasner sent on February 16 at 8:18am, he addresses the same group again, reiterating his demands from the previous week and threatening to fire the managers if they do not meet them within the following two days:
[…]Team, last week I told you that two things were very important…It is unimpressive that no one achieved 1/3rd [of deal commitments]. Every one of you should use the remaining 2 days. Otherwise we must meet next week with HR to discuss contractual changes.[…]
Glasner includes a Spreadsheet table in the email that indicates twelve Groupon territories (in Germany and Austria), the respective managers in charge, and the data on deals closed. All results are far below targets, indicating that the involved managers will almost certainly fail to meet demands.
According to several trusted sources, this email is just one among many
In one such email leaked to VentureVillage‘s sister magazine in September 2011, an unconfirmed source issued several complaints about the work environment and policies at Groupon, here summarized into English. His complaints include:
Contracts issued on a short-term basis with staff fired very quickly; that many employees only stay for 14 days; that working hours are from 8am-10pm with few breaks; that team meetings are full of insults, non-performers openly bashed in meetings as well as via email; that clients who have previously refused participation are forwarded along to new employees so that they can be re-approached.
Complaints include ‘Hire and fire’ mentality, as well as unprofessional standards
The rate of staff fired is reportedly very high at Groupon, according to the September leaker. The figure mentioned (in September) was that the company had 150 employees but there could be as many as 500-600 former employees in Germany.
In the September email, the sender criticizes the company’s policy of issuing deals:
They promise what the customer wants to hear. Most of the time they do not tell customers that it is possible to cap deals at a certain number so that Groupon earns more money. This leads to smaller companies having more customers than they can serve.
According to the sender, the deal fee is supposed to be around 30%. The source reports seeing higher figures in the IPO documents. None of these figures have been confirmed.
Other complaints include tight working quarters, which we did not observe personally in our visit to the office.
Ex-Groupon manager and trusted source offers his comment
“This is one of the softer things that has happened at Groupon,” said one ex-Groupon manager, who prefers to remain unnamed, after reviewing the emails. “This is classic Oliver psychology. Expectations are always out of reach. If you’re able to meet 1/3rd of expectations, you’re going far and beyond the possible.”
He continues, adding that the issued demands were often hard to reach despite the proficiency and intellect of the managers. “These are guys coming out of McKinsey. They didn’t know much about the internet or sales business before Groupon and are now thrown into this pressure cooker environment, created by Oliver Samwer’s management style.”
“Titles don’t mean anything at Groupon”
The ex-Groupon manager continued to explain why the information contained does not surprise him. “Those titles are just there because some of those (sales) people are stupid and greedy enough to think a title at Groupon is a reason for quiting their current jobs. And second: this is sales. They should know exactly that this is a performance-driven job, that´s why they earn extremely good money (better than any other teams at Groupon, even more than high class IT and Online Marketing Specialists). And of course they are managers, and if a manager doesn’t perform, he/she loses his/her responsibility/title.”
Glasner responds with an official statement to Vertical Media
In the following statement sent to Vertical Media at 11:59am today, Glasner issued the following (translated from German):
The points addressed by you do not correspond to the truth and also in no manner reflect the everyday work life at Groupon. The relation to our partners is one of our most important success factors, and we’re very careful with that. We of course comply with all legal determinations. Like in every larger business, there are past cases in which we did not end our contract positively with specific staff members. Every one of these cases is unpleasant for us, fortunately representing however the exception. Groupon’s success is based upon the success of its employees, many of which are working in Germany. We are very proud of our team of several hundreds of employees in Germany many of which have been with us from the beginning. And we continuously seek to further enlarging our team in Germany and also internationally in all departments.
Read our sister site, Gruenderszene’s, report in German here