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LivingSocial Cuts Jobs By 50% While Focusing On Card Linking Discount Business

Mar 21, 2016 11:46 AM EDT

LivingSocial Inc., the Washington based online market place, has announced on Tuesday, laying-off 160 employees including 85 in the Washington. The ecommerce platform has also planned shutting down its customer services operations in Tucson, Arizona over the next two months accounting for a further 120 people. Thus the total number of lay off reaches to 280, which addresses for 50%-60% of its total workforce. 

LivingSocial call center duties will be outsourced by an unnamed New Jersey based service provider. The ecommerce darling and Groupon foe will employ around 200 to 225 people after the cut. LivingSocial has employed more than 1,000 people at its peak in the Washington DC and more than 4,000 across the world, reports The Washington Post.

The move appears as the latest bout of cuts since inception of the CEO Gautam Thakar after joining the company in 2014. The new CEO has been trying to transform the company away from its declining business in daily deals. Notably mentioning, the online marketplace is partly owned by Amazon, according to a report published in TechCrunch.

The company witnesses the legacy voucher deals business to reach the break even and intends to allot all future investments to 'card-linking' discount business. The product allows LivingSocial customers registered with certain credit cards to enjoy discounts at participating restaurants simply by paying for a meal.

Participating restaurants control period and percentage of discounts. LivingSocial has succeeded signing up three times the number of restaurants in the three cities where the product is being tested as it has witnessed in its traditional voucher business, according to a report published in Re/Code quoting the CEO while covering an interview.

Notably mentioning, LivingSocial has laid off 200 employees in October last year and is believed to remain downsized for a while. Intriguingly, its longtime rival Groupon has reportedly been doubling down the daily deals whenever LivingSocial is moving away from those keeping at cornerstone of the business.

Groupon has announced on Monday a revamped platform for merchants including a new iPad app to help retailers create market and redeem daily deals. LivingSocial has raised more than $934 million in total from Amazon, J.P. Morgan and Lightspeed Venture Partners. However, the business hasn't received any new fund since February 2013. The ecommerce platform has cut nearly 900 jobs over three rounds since Thakar took the charge from Tim O'Shaughnessy 18 months back.

LivingSocial hasn't followed its arch rival Groupon in further strengthening its daily deals. Instead, the ecommerce platform has transformed its business focus on card linking discount offerings which witnesses response from participating restaurants. The new CEO of LivingSocial is going through a massive lay-off, for the third time since his taking over the charge.

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