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Tuesday, July 30, 2013

LivingSocial Closes NY Offices

LivingSocial Closes NY Offices
Courtesy of LivingSocial

Back in December 2010, Amazon announced they would invest $175 million in Livingsocial, the daily deal company who was competing with Groupon. The future certainly looked promising for this startup but only 3 years later, it’s facing challenges in the market. 

The first quarter of 2013, LivingSocial posted sales of $135 million, up 23% on a year ago, but it also reported a net loss of $50 million, from net income of $156 million in Q1 2012.

Just recently, TheNextWeb published that LivingSocial would be closing their NY offices at Fifth Avenue and they're terminating the local events division. According to Sara Parker, head of communications, some of their staff who can’t work remotely is still being provided separate office space in New York (Hey Sara! Call OfficeList, we’ll help you!) while the rest will be working remotely. Less than a month earlier, LivingSocial had also closed the doors of its Seattle office and their staff is also working remotely. 

According to TheNextWeb, “over 60 part-time employees in New York, which provided onsite support to the previously mentioned events, will also be let go by October 1st — once LivingSocial concludes its final, locally-focused events in the city”

The company claimed it was a decision made to focus on achieving profitability and not reducing costs. 

What’s the future of LivingSocial? Nobody knows, as they recently mentioned they had job vacancies and were looking to grow their call center team in Tucson. Somewhat contrasting with the situation in Seattle and New York. 

The fact is the market for daily deals is not at its best moment. Groupon, its biggest competitor, reported in February a considerable loss and it also lost its founder and CEO Andrew Mason.

What do you think of LivingSocial closing its NY offices? What’s the future of the daily deal market? Share your thoughts in the comment section. 

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