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Capital Business
Posted at 12:47 PM ET, 11/29/2012

LivingSocial lays off 160 in Washington

LivingSocial will terminate 160 workers in the District as part of a wider layoff at the daily deal purveyor, which has seen its once-explosive business model struggle in recent months.

A company spokesman confirmed that 400 employees have been let go, most of whom are based in the United States. The terminated positions primarily include sales and customer service representatives.

LivingSocial spokesman Andrew Weinstein said a portion of the customer service positions in Washington will be relocated to the company’s call center in Tucson, Ariz., where the company can employ lower-skilled workers at less expense.

It’s unclear whether the layoffs in the District will make LivingSocial ineligible for a $32.5 million tax credit passed by the D.C. Council earlier this year. The company has to meet certain benchmarks, including hiring locally, before it can claim the benefits in 2016.

Weinstein said there are no additional layoffs planned for the company’s employees in the United States.

The company’s international businesses have been among the hardest hit. LivingSocial has pulled out of some international markets where its daily deals weren’t expected to turn a profit.

The company also reported a net loss of $566 million for the third quarter after writing down the value of the international companies it acquired over the last year.

Weinstein said the company is performing a review of its international business now, but declined to speculated whether overseas layoffs would be forthcoming. About two dozen of the people let go this week are based overseas, he said.

What’s more, Eric Eichmann, president of LivingSocial’s international business, will step down. Weinstein said his departure is not part of the layoffs, but came after discussions with Chief Executive Tim O’Shaughnessy.

O’Shaughnessy removed several other managers earlier this year, including Holly Tennant Billy, head of business development, and Dickson Chu, the head of LivingSocial’s nascent merchant solutions business.

O’Shaughnessy is the son-in-law of Donald E. Graham, the chairman and chief executive of The Washington Post Co.

By  |  12:47 PM ET, 11/29/2012

 
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