Update: The CEO sent an email (below) confirming the layoffs Thursday morning. A source tells Valleywag that LivingSocial just announced 20 percent layoffs at the company. The "online marketplace" for local deals raised $934.7 million in venture capital. Earlier this year the company invested heavily in recruiting for its Los Angeles office, but the source says that office will be closed. I reached out to LivingSocial to confirm the layoffs and will update when I hear back.
Ex-eBay executive Gautam Thakar was named LivingSocial's new CEO this summer. A few days ago, he was talking to the press about his plan for a "more focused" company. LivingSocial previously shed hundreds of employees under former CEO Tim O'Shaughnessy through "layoffs and divestitures."
On what LivingSocial will look like in a few years:
"I think it will be more focused. One of the things we are working on right now as part of our 2015 planning is exactly this question, is what is the strategic plan for the next two to three years, but more importantly what is our consumer value proposition and how do we align our resources around that. Today we sell all sorts of products to all sorts of people. And we also have goods — not unlike Groupon, though certainly not of that magnitude. We have experiences, restaurants, escapes, travel. We have a lot of product categories here. One of the focus areas might be to consider narrowing to fewer categories."
Update: LivingSocial CEO sent his employees this email confirming the layoffs on Thursday morning.
Today is a tough day. We are announcing the difficult decision to close down our sales facility in Torrance, California and reduce our total workforce by approximately 20% with a total of approximately 400 employees affected.
Since I joined LivingSocial three months ago, you have heard me share transparently about the urgent need to address our challenges and focus our efforts. In the same transparent vein, I want you to hear about the decision to reduce our workforce directly from me.
This is a painful decision, especially given our strong cash position, but one that I feel needs to be made to ensure that we enter 2015 with more focus. This will mean a reduction of investment in some areas of our business, and a reshaping of how we operate.
This action will allow us to continue to invest in technology, mobile, and data, and over time will force us to simplify our complex business portfolio.
This decision was not made lightly. Over the last three months, I've taken the time to understand our business, and the people who have helped build it. It is clear that we have lacked focus in an industry where growth has flattened. You have heard me use the term "refocus" to talk about what lies ahead. Simply put, there are many elements of our core business that have real value – our customer base, quality merchants, our cash position, and our people. Now is the time to refocus on those assets and invest in areas where we can win.
Focus has many benefits, but also some consequences. One unfortunate consequence is that many of our talented teammates will not be a part of the next chapter of our company. Over the course of the day, we will be notifying those whose positions are being eliminated. While we will treat every LivingSocialite with the respect they deserve, it does not make it any easier for those impacted, or for those that they worked with. In that context, I want to thank you all in advance for maintaining a respectful environment as some of our friends and colleagues leave our team.
Today is a tough day. I wish I did not have to make this decision, but it is necessary to ensure that we can continue to invest in building lasting value for our company and our customers.
This is a breaking news post, we'll update as we learn more. To contact the author about LivingSocial, please email firstname.lastname@example.org.