D.C.-based daily deals company LivingSocial Inc. announced Thursday it will reduce its total workforce by about 20 percent in what new CEO Gautam Thakar called a necessary step in the “refounding” of the company.
The layoffs will impact about 100 of LivingSocial’s roughly 500 District-based employees and about 400 companywide. The workforce reduction includes the closure of the company’s sales facility in Torrance, California. A handful of California-based employees will remain with the company and work remotely.
The layoffs come as a result of an in-depth review of the company’s business operations that followed the appointment of Thakar in August.
“One of the conclusions is there is a huge market in local and national deals, but the reality is we were undertaking too many things and needed to focus,” the former eBay exec said.
The workforce reduction will create a more efficient sales model and open the company to fund areas of growth, Thakar said, with an emphasis on technology, mobile and data science.
LivingSocial will continue recruiting in these sectors.
“Investing in app and mobile is something that makes sense,” Thakar said. “It’s a more scalable way of doing business and creates a business model we can win in.”
Thakar also said he wants to focus on seeing more long-term deals and better client retention.
Once Thakar identified the areas of concentration, he said he wanted to be direct and transparent and move forward swiftly with changes.
Layoff notifications were made Wednesday night and Thursday morning. Impacted employees will be offered severance packages, assistance with continuation of health benefits and outplacement support.
“When I came to this company, I knew it was going to be an exciting but tough, long journey to get us where we want to be as a business,” he said.
Last week, LivingSocial posted a widening $32 million third quarter net loss on $64 million in revenue.
