LivingSocial Lays Off 200, 20% Of Staff, As It Shifts From Deals To ‘Experiences’

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Its been crunch time for daily deals sites for a while now, and today one of the bigger and older of those platforms is announcing a round of layoffs as it looks to cut costs, reorganise its operations, and push itself into profitability. LivingSocial, the Washington-based local deals platform part-owned by Amazon, is laying off 200 people, or 20 percent of the company’s workforce.

LivingSocial says affected staff are being notified immediately and will be offered severance packages and outplacement support.

CEO Gautam Thakar, who joined the company just over a year ago from eBay, tells TechCrunch that the cuts will be made in the company’s U.S. operations and across all departments, but with an emphasis in operation areas like sales and customer care. “We’ve been investing in technology in the past year, and in areas like customer service, we have been able to automate much more,” he said. 

While people have been complaining of “daily deal fatigue” for years already, companies like LivingSocial that built businesses on the model of cut-price, time-sensitive offers of products and services have been trying to move into other areas. While Groupon has been positioning itself as a one-stop shop for local commerce, LivingSocial’s Thakar has been trying to reshape the business as an “experiences marketplace.”

By this, the company means that it is looking to provide a more comprehensive set of offers around specific verticals — beginning with two, health and beauty (‘Fastbook’) and restaurants (‘Restaurants Plus’), which are being piloted respectively in Austin and Atlanta.

The idea here is to provide an interface for people to search across a range of offers, to be able to sign on for specific time slots to use those deals, and then to pay and get discounts only when the offers get redeemed rather than in advance.

LivingSocial’s last big round of layoffs was in November 2014, when the company cut 400 jobs. Since then, it has also continued to downsize and sell off its unprofitable international operations. But it’s not the only one: last month, its big rival Groupon announced 1,100 layoffs and the closure of several operations outside the U.S.

For now at least, it doesn’t appear that operations in the UK and Ireland — LivingSocial’s last two international markets outside of North America — are being affected.

It’s not clear what cost the layoffs will be to LivingSocial. The company has raised over $930 million to date and is not currently raising more, Thakar said.