Groupon Inc. plans to cut about 1,100 jobs globally as part of a reorganization of its international operations.
The cuts represent about 10 percent of the workforce at Chicago-based Groupon, which has been expanding overseas and struggling to diversify away from its origins as a daily deals site.
The company expects pretax charges of as much as $35 million as a result of the reductions, including about $22 million to $24 million in the third quarter. Most charges will relate to employee severance and compensation benefits and will be paid in cash, Groupon said Tuesday.
Groupon makes more than 35 percent of its sales outside of North America, and the dollar’s strength has crimped its efforts to expand internationally. In April, Groupon sold a controlling stake in South Korean e-commerce site Ticket Monster to investment firm KKR & Co. and Hong Kong-based Anchor Equity Partners, for $360 million. And last month, venture capital fund Sequoia India agreed to invest in Groupon India.
“They’ve tried to clean up their international operations for several years now,” said Blake Harper, an analyst at Topeka Capital Markets Inc., who recommends holding the stock. “They’ve also exited a lot of markets internationally. This is a natural extension of that.”
The shares were little changed at $4.14 at 9:34 a.m. in New York. Through Monday, the stock had slumped 50 percent this year.
Groupon will have about 9,800 employees after the cuts, Bill Roberts, a spokesman for the company, said in an e-mail.
© Copyright 2023 Bloomberg News. All rights reserved.