LivingSocial Lays Off 400 Workers As Business Slips
LivingSocial has announced it is laying 0ff 400 workers, or about 10 percent of its global workforce, as business slips. The hardest hit departments will be sales, customer service, and the editorial department.
CNNMoney confirmed the move and Living Social spokesman Andrew Weinstein spoke with them, saying:
“We’ve gone through two years of hypergrowth, from roughly 450 employees to 4,500. The space has gone through such growth that we needed to catch our breath.”
The LivingSocial layoffs follow a disappointing third quarter for the daily deals site, which showed an operating loss of roughly $565 million. Their net loss was $566 million. Amazon also reported a loss of $169 million related to their equity-method share of the losses reported by LivingSocial.
AllThingsD obtained a memo by LivingSocial’s CEO Tim O’Shaughnessy, who explained:
“In layman’s terms we took a charge of around $496 million because we had to revalue some of the companies we acquired last year. As you know, the market has also dropped over that same time for similar public tech companies. Those changes in valuation showed up as an ‘impairment’ in our financial statements, but they do not affect the day-in, day-out operations of the business.”
The job cuts by LivingSocial are mostly spread across the US, though there were some job cuts overseas. Weinstein also stated that the majority of the company’s customer service will move from its Washington, D.C. headquarters to Tucson, Arizona, where some job openings will be available.
In an unrelated move the company’s president of international operations, Eric Eichmann, will be stepping down.