Groupon, the Chicago-based company known for its online marketplace that connects customers with services and experiences, is facing an uncertain future, with executives saying the company could run out of cash within a year.
Leadership addressed the situation in an earnings conference call on Wednesday, detailing its restructuring plan and additional cost-cutting measures, including terminating the lease of its River North headquarters. Groupon has paid $9.6 to end the lease on Jan. 31, 2024 – two years earlier than it had planned, according to the Chicago Sun-Times.
Most recently, the struggling entity laid off 500 workers in January in yet another attempt to cut costs just months after it eliminated 500 employees in August, the newspaper reported. Groupon’s stock has dropped 65% year-to-date, and in the last month alone, has declined around 26%.
In the recent earnings call, Dusan Senkypl, who was appointed CEO earlier this year, told stakeholders that he understands their disappointment and that he has “been struck by the opportunities we have internally to operate in a much more efficient and productive way.”
“We can generate much higher output with the same or even less resources,” the CEO said, according to a call transcript. “My initial focus is to execute on these opportunities so that we have a solid base for future growth. I also acknowledge that we are facing challenges that we need to address and thus you are all looking for responses from us.”
The company has decided to implement a cost-cutting strategy, which the CEO described as “a focused transformation” that requires the company leverage all of its assets.
“We have developed our transformation strategy by drawing inspiration from, a, the principles of building a successful Internet marketplace; b, automate Groupon a past success and c, a Groupon clone in the Czech Republic which successfully completed its transformation from a daily deal discount flash site to a destination experience marketplace,” Dusan explained.
Groupon’s financial challenges have largely risen since the pandemic, which caused many of its clients to face revenue losses of their own.
from NBC Chicago https://ift.tt/NCyiMtD
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