Groupon Inc’s China joint venture has fired a large number of workers for poor performance as the company competes for customers in the world’s largest Internet market, a person with knowledge of the matter said.
The Gaopeng.com (高朋) site is financially viable and still hiring, said the person, who declined to be identified because the moves were not announced publicly.
The firings were not made out of necessity, the person said.
Groupon, which plans an initial public offering to raise US$750 million, is making “progress” in China after opening Gaopeng.com earlier this year with investment by Tencent Holdings Ltd (騰訊), Groupon CEO Andrew Mason said in June. Gaopeng offered daily deals for goods and services in 30 cities as of June.
“Groupon’s approach to international expansion is to aggressively create a large presence upfront and refine our strategy as we gain deeper insight into the local market,” Julie Mossler, a spokeswoman for Chicago-based Groupon, said in an e-mailed statement. “We view any adjustments to the business as very typical in order to build a long-term foundation for success.”
Former and current employees of Gaopeng.com say more than 10 offices were closed, and a lawyer representing former Gaopeng employees estimated that about 400 people have been fired, the Wall Street Journal reported earlier.
The moves may mark a reversal of Groupon’s China expansion plans, the newspaper said.
Gaopen national sales director Sarah Burton declined to comment yesterday on whether any offices were closed or any workers fired.
Gaopeng had hired 3,000 workers in China as of June 10, chief operating officer Ouyang Yun (歐陽雲) said at the time. The site faces competition from more than 3,000 group-buying Web sites in a China market that generated an estimated 1.5 billion yuan (US$235 million) of revenue last year, according to estimates from iResearch in Beijing.