|Local deals site LivingSocial lays off 280, over 50% of staff, outsources customer services|
by Ingrid Lunden ( @ingridlunden)
March 16, 2016
More bad news for LivingSocial, the beleaguered commerce platform that competes with the likes of Groupon in offering deals on events and services local to its users. Today, LivingSocial announced that it would lay off 160 employees, and over the next two months, it will shut down its customer services operations in Tuscon, AZ, accounting for a further 120 people — bringing the total to 280.
LivingSocial will be outsourcing call center duties to an unnamed U.S.-based service provider, which the company says is based in New Jersey.
This is the latest round of cuts under new CEO Gautam Thakar, who joined the company in 2014 and has been trying to shift the company, partly owned by Amazon, away from its declining business in daily deals.
The aim of the move is to get the company to a break-even point on that legacy business, which is based around vouchers for services and events, while also putting it into a stronger position to work on its newer business based on card-linked offers for specific verticals. Thakar in the past has referred to this as LivingSocial’s “experience marketplace.”
“Early customer adoption of our card-linked product has encouraged us to shift future investment from our voucher business,” said Thakar. “As a smaller organization, we will focus on scaling our card-linked offer initially in the restaurants category, before adding other categories in the future. While it is never an easy decision to say goodbye to talented colleagues, we believe that we are now in a more stable position to invest in the next phase of our journey.”
The company has been downsizing for a while now, and most recently laid off 200 people in October last year.
LivingSocial has launched a couple of products around the card-linked concept, in beauty and restaurant deals.
Restaurants Plus, as the latter is called, has expanded to Washington and San Francisco from an early trial in Atlanta, and it lets customers “reserve” an offer by entering their payment card details (or those linked in their existing LS account). The offer is redeemed when the customer presents that payment card at the venue. It also gives the merchant more flexibility in how it can moderate the offers.
While LivingSocial is moving away from daily deals, it’s interesting to see that its longtime rival, Groupon, is doubling down and keeping these as a cornerstone of its business — with more modern improvements. Just yesterday, the company announced a revamped platform for merchants, which included a new iPad app to help retailers create, market and redeem daily deals.
LivingSocial has raised more than $934 million to date but has not brought in any new funds since February 2013.