LivingSocial Confirms Layoffs: 400, All But A Couple Dozen In The U.S., 10% Of Workforce

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It’s not only Groupon that is feeling the crunch among daily deal sites: LivingSocial is laying off 400 employees today. There were reports of the layoffs out yesterday from more than one source; the company confirmed the number to TechCrunch in an email just now. “I can confirm that we notified approximately 400 employees today — all but a couple dozen in the United States — that their positions are being eliminated,” a spokesperson told me. “That’s about 10% of our global workforce.” The cuts come in sales, customer and merchant services, and the company’s takeout/delivery service.

After two years of “hyper-growth” in which the company went from 450 to 4,500 employees worldwide, raising $800 million in the process, now LivingSocial is cutting itself down to size after reporting a net loss of $566 million in Q3 after write downs from unprofitable acquisitions.

According to Amazon, which owns about 30% of LivingSocial, the company had revenue of $124 million in Q3, double the revenue from the quarter a year earlier

“These moves will align our cost structure with our 2013 plan and free up resources for critical investments in marketing, mobile, and other areas,” the spokesperson said.

We are following up with LivingSocial to ask about what departments may be affected, and whether any executives are leaving, and whether it will sell some of the assets it has acquired. We’ll update as we learn more.

[Update] Here is how the numbers break down: “Nationwide, the largest impacted group was sales, as we restructured our sales organization to focus on our most profitable markets and regions,” the spokesperson says. He says “a number of positions” in its customer and merchants services groups, as it moves those positions from D.C. to a new call center in Tucson. He says the company will rehire “a number of those positions” in Tucson over coming weeks.

And although not many of the layoffs are taking place on the international side, it is losing a key person. Eric Eichmann is leaving his job as president of the international business unit. “Eric and our CEO [Tim O’Shaughnessy] reached a mutual decision that this would be a good time for him to leave, as the scope of his international position has changed over the past year,” said the spokesperson. No other senior executives were announced today.

As for products, Takeout & Delivery is being “refocused” on a smaller number of markets “to find the right formula for success, and some positions were affected by that shift.”

The company is doing battle not only with Groupon but a million other sites that have cropped up to offer daily deals. Groupon has been trying to pivot to becoming more of a marketplace for local commerce, but that hasn’t produced as fast a return as some had hoped. Now people are calling for the head of CEO Andrew Mason.

LivingSocial has had its own share of executive turmoil, including the departure of co-founder Eddie Frederick earlier this year. There had been reports of layoffs coming for a long time at the startup.