Groupon Plans to Cut Nearly a Quarter of Its Workforce to Advance AI Transformation

According to the Wall Street Journal, the online marketplace platform Groupon announced a restructuring plan that will reduce up to 400 positions globally, which is nearly a quarter of its total workforce. This move aims to advance the company's previously disclosed strategy of reshaping the company into a native artificial intelligence enterprise through structural adjustments.

Groupon estimates that this restructuring will result in pre-tax charges of $7 million to $13 million, with the majority of the funds used to pay employee severance packages. Most of the layoffs are expected to be completed by the end of the third quarter, according to its latest filing with the U.S. Securities and Exchange Commission, as of December 31, the company had a total of 1,734 employees worldwide.

The reduction in personnel is expected to save the company up to $25 million in expenses annually, with an estimated $10 million to $12 million expected to be realized this year. The company plans to reinvest half of the savings realized this year into market marketing, artificial intelligence infrastructure construction, and increasing talent density, while continuing to assess other automation and cost-saving measures.

Thanks to the cost optimization brought about by restructuring, Groupon has raised its full-year adjusted EBITDA forecast from the previous $70 million to $75 million to $75 million to $80 million. Driven by this increase in profit expectations, the company's stock price rose by 9.30%, closing at $20.69. In addition, the company announced that Chief Operating Officer Jiri Ponrt has decided to resign and will officially step down on July 10.