Groupon (GRPN) Stock Closed Down on Job Cuts, Market Exits

The company has started selling products on its Web site.

Rich Williams revealed this restructuring in a blog post stating, “We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries”.

Most of the roles are lost in Groupon’s departments for customer service and sales, with the company’s operations in Morocco, Thailand, Uruguay, the Philippines, Panama, Puerto Rico and Taiwan ceasing immediately.

Those measures will cost approximately $ 35 million before tax of which between 22 and 24 million will be passed in the accounts of the third quarter. The company is now facing various challenges, including decelerated customer growth, and excessive build-up of low-margin inventory, compelling the company to diversify its operations. The Pharmaceuticals – NEC Company will present new data on early- and late-stage compounds from its refocused oncology and immuno-oncology pipeline, in addition to Erbitux® (cetuximab) data, at this year’s European Cancer Congress (ECC), held in Vienna, Austria, from September 25-29, 2015.

Although analysts then pointed to financial power in the form of its “stealth assets”, including a recently sold stake in South Korea group Ticket Monster, the company’s core business has consistently struggled to return a profit. “So, we chose to exit a number of countries where the required investment and market potential don’t align”.

Groupon was founded in 2008 and became a worldwide sensation thanks to its very popular daily deals format. It says the company had taken a step that showed it was maturing, and that the move would add to Groupon’s operational efficiency.

“We’re doing all we can to make these transitions as easy as possible, but it’s not easy to lose some great members of the Groupon family”.

Forte reiterated a Buy rating on Groupon shares, with an $8 price target, which implies an upside of 112% from current levels.

The stock is now down 2.20% at $3.99 as of 9:59 AM EDT Wednesday.