Kyle
We reported early this morning that Washington DC based daily deals starutp Living Social was planning on laying off 400 people. That came to fruition later this morning and was announced by company spokesperson Andrew Weinstein.
Weinstein confirmed all 400 layoffs and said that they were spread across sales, editorial and customer service. They are also looking to streamline all of their operations and with that they are centralizing customer service to an office in Tuscon Arizona. Customer service jobs that were based at the companies DC offices are either being cut or moved to Tuscon. There may be some job openings at the Tuscon customer service office later on.
This may not bode will for Living Social who just received a major tax break from the DC government. Under the deal for the $32.5 million dollar tax break, LivingSocial is supposed to move to a massive, centralized headquarters and keep 1000 employees in DC.
Living Social is also trying to calm the editorial and social swell from the announcement. Many journalists, bloggers and investors in daily deals, are starting to worry that the once hot space is “over”. Weinstein told CNN “We think this actually puts us on the right path for long-term growth and profitability,”
Groupon, Living Social’s biggest rival and the big winner in the daily deals space, is going through turmoil themselves. It’s been widely rumored that the board of directors at Groupon is looking to replace CEO Andrew Mason. Their stock has performed dismally since going public and there has been a lot of executive turnover at their Chicago headquarters.
To add to LivingSocial’s problems, a month ago Amazon reported a $169 million dollar write down on it’s $175 million dollar investment in LivingSocial.
Linkage:
Earlier story from nibletz is here
