Discount giant Groupon cuts 100s of jobs after customer shift
There was a time when Groupon was almost a sure place for getting a deal.
People used it to try a new restaurant, book a massage, buy discounted concert tickets, plan a weekend activity, or find a cheaper way to do something local.
For small businesses, it was a way to reach customers who might not otherwise walk through the door.
But the internet has changed since Groupon's peak.
Consumers now discover restaurants, spas, events, travel deals, and local activities through TikTok, Instagram, Google, Yelp, travel platforms, and newer AI-powered search tools.
Groupon is now actively trying to remain part of that discovery process, even as the company is much smaller than it was five years ago.
It is making another major change.
The company is cutting around 400 positions globally, including employees and contractors, as part of a restructuring plan tied to its strategy to rebuild itself as an AI-native company.
Groupon's board approved the plan on May 21, according to a filing with the Securities and Exchange Commission (SEC).
The company said most of the reductions are expected to happen by the end of the third quarter of 2026. The timing could extend beyond that in some jurisdictions because of local legal requirements, including mandatory consultation processes.
Why is Groupon cutting 400 jobs?
In an SEC filing, Groupon said the initial phase of its restructuring plan is expected to include an overall reduction of up to 400 positions globally.
The company expects to incur $7 million to $13 million in pretax charges connected to the restructuring. Most of those charges are expected to be paid in cash and relate to severance and compensation benefits.
Groupon said the payroll actions are expected to generate annualized cost savings of $20 million to $25 million.
More Layoffs:
- E-commerce giant shuts down office as layoffs rise
- Breakfast giant shuts plant, cuts 100s of workers
- Credit Karma lays off 117 workers despite sales surge
The company expects to realize $10 million to $12 million in gross savings in 2026 and plans to reinvest up to 50% of those savings this year in marketing, AI infrastructure, and talent density.
That means the layoffs are not only about reducing expenses. Groupon is also trying to shift money toward the areas it believes will help it move faster and compete in a changing local-commerce market.
Groupon joins a growing list
A view not far from some of the other companies that have announced restructuring plans in the past few months.
From big tech names like Meta and Cisco to retailers like Starbucks and Kellogg's, they all talked about reinventing marketing strategies or using the savings to invest in specialized areas of success.
The company said the initial phase of the restructuring plan is expected to generate about $5 million in net savings in fiscal 2026.
As part of the plan, Groupon said it is also evaluating additional material cost-reduction and automation actions related to Project Foundry.
Those actions would be subject to board approval and, if approved, are expected to be completed by the end of 2027.
The restructuring also comes with an executive change.
Jiri Ponrt, Groupon's chief operating officer (COO), notified the company on May 21 that he would resign, effective July 10. Groupon said his resignation was unrelated to any disagreement with the company.
Photo by SOPA Images on Getty Images
What is Groupon's Project Foundry?
Groupon has described Project Foundry as a companywide effort to transform its operating model by embedding AI agents into the core of every function.
In its first-quarter shareholder letter, Groupon said Foundry is not a single product launch. Instead, it called the project a redesign of the company's operations.
"Groupon is uniquely positioned at the intersection of the AI economy and the millions of local merchants who power Main Street. We are rebuilding Groupon as an AI-native company to operate at the velocity the era of agentic commerce demands and better deliver on our mission, serving both customers and merchants," said Dusan Senkypl, CEO, Groupon.
The company said it is using AI agents to give business and product owners more direct access to data, tools, and creative support, reducing the traditional analytical and engineering layers between an idea and execution.
Groupon said it will pilot AI voice agents to conduct outbound outreach to small and midsize merchants, aiming to have most new merchant meetings set by AI voice agents by the end of 2026.
The company also said its marketing teams are using AI tools across search engine marketing and search engine optimization to evaluate campaign performance, generate creative variants, and run optimization experiments faster than before.
For employees, however, that operating shift means fewer roles.
Before the latest board-approved plan, Groupon said it had already reduced total headcount by about 5% in the first quarter and was evaluating another reduction of roughly 15%.
Groupon has fewer customers than in 2020
Groupon is still used by millions of people, and its customer count recently improved.
In the first quarter of 2026, the company reported 16.2 million trailing-12-month active customers, up 5% from a year earlier.
But that is far below where Groupon stood at the end of 2020, when it reported 29.6 million active customers.
The drop in purchases has been even sharper.
Groupon reported 8.1 million total units in Q1 2026, down 5% year over year. At the end of 2020, it reported 25 million consolidated units in the fourth quarter.
Revenue has also changed dramatically. Groupon reported $117 million in revenue in the first quarter of 2026, essentially flat from a year earlier. In the fourth quarter of 2020, the company reported $343 million in revenue.
Now, the company is trying to make a smaller-marketplace move faster, improve customer engagement, and bring more local merchants onto the platform, with AI playing a pivotal role in this restructuring.
Groupon says local business remains key
Groupon's current mission is to "get people offline through quality local experiences at great value."
That phrase reflects the company's attempt to return to its strongest identity: connecting consumers with local services, activities, and experiences.
North America Local remains Groupon's largest category. In the first quarter, it represented about 68% of global billings and 73% of global revenue.
But that part of the business is still under pressure.
North America Local billings grew 2% year over year to $261 million, while revenue was essentially flat at $86 million. Units fell 4%, even as local active customers grew 8%.
Groupon said the results reflected a mix of demand-side pressure and supply-side deceleration. The company said its small-business merchant base in North America Local slowed from high-single-digit growth in the fourth quarter to roughly flat in the first quarter.
Health, Beauty and Wellness, the company's largest North America Local vertical in the quarter, also posted its first soft quarter after four consecutive growth quarters.
Things to Do remained a bright spot, delivering growth led by tours, attractions, and seasonal expansion.
Groupon tries to regain momentum
The restructuring also comes after a volatile stretch for Groupon's stock.
Groupon's stock recorded a 52-week low in March before recovering in recent months.
Groupon is not disappearing. It still has millions of active customers, a large local marketplace, and a brand many shoppers recognize.
But the company is also far smaller than it was five years ago, and it is trying to prove it can rebuild for a new era of local discovery.
For Groupon's workers and contractors, the company's AI shift has an immediate human cost.
For the company, it is a bet that a leaner, more automated operating model can help it regain speed and relevance.
Related: Breakfast giant shuts plant, cuts 100s of workers
The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
This story was originally published June 2, 2026 at 6:33 AM.