Executives at District-based LivingSocial outlined a new strategy last week that would move the company away from its daily e-mail deals toward those that sit on its Web site for longer periods of time.
But in a round of interviews at the firm’s New York Avenue NW headquarters, senior leaders delved into a variety of other topics, including plans to hire across the company and profitability projections.
Here are the highlights from those interviews:
• On hiring:
Executives said the company intends to hire “a couple hundred” employees in departments as varied as sales, finance, marketing and engineering.
For those who follow LivingSocial’s trajectory, the news seems confounding. Less than 12 months ago, the firm laid off 400 workers, primarily in the United States. Of those, 160 were based in D.C.
Executives said many of those cuts came from markets, both overseas and domestic, as well as lines of business that weren’t generating sufficient revenue. Other areas, however, merit additional staff.
“At the time you heard [chief executive Tim O’Shaughnessy] say we’re investing less in some areas and investing more in other areas,”said Jake Maas, senior vice president of product and operations. “I think you’re seeing [hiring in] some of the areas that we’re investing in, that we’re excited about, that we think are going to drive growth.”
There’s even a $6,000 reward for employees that refer successful applicants.
Executives said many of those hires will be based here in the District, though others will be located in the company’s sales and customer service centers around the country.
“We’re expanding a couple of sales centers and they will be hiring dramatically,” Chief Financial Officer John Bax said.
• On overcoming April’s cybersecurity breach:
Hackers gained access to identification information and some encrypted passwords for LivingSocial customers in April, forcing the company to ask 50 million subscribers to reset their passwords.
“We did a lot of very aggressive efforts in the month or two after the breach and got some really good fruits from those efforts. And we continue to try and re-engage and get customers back,” O’Shaughnessy said.
“Do we have every single customer we had before back with us? No. But we feel pretty good about the fact that we’ve been able in the following three-plus months to make very rigorous headway on that,” O’Shaughnessy added.
Still, lasting damage was done.
The firm “had a pretty fair drop in revenue in May,” Bax said. “We were told to expect [the drop] would be in the teens or twenties and, lo and behold, we got what we expected..”
Who gave the company those expectations? Other consumer-focused firms that have endured similar breaches reached out to LivingSocial after it went public with the attack.
“You would be surprised at the number of Fortune 500 and even Dow 30 companies that have had a security breach,” Bax said. “It’s unfortunate, but there’s a large peer group we have to talk to.”
In the long term, the firm likely lost some of its subscribers permanently. Though executives said the majority of customers reset their password and returned to the site, others simply took the attack as an opportunity to opt out.
• On reaching profitability:
O’Shaughnessy told employees earlier this year that the company was on track to reach profitability by the second quarter of 2013.
That time has come and gone, and the company has yet to post a quarterly profit. Executives said the aforementioned cybersecurity breach derailed those efforts.
So when will LivingSocial see rosier finances? O’Shaughnessy said his past assertion has taught him not to make public promises he cannot guarantee will keep.
“I think I’ve learned my lesson on that one,” O’Shaughnessy said. “You never know what’s going to happen and it seems like the downside versus upside with the predictions, the past has shown the downsides tend to be a little bit greater.”
(O’Shaughnessy is the son in law of Washington Post Co. Chairman Donald E. Graham. Jeff Bezos, the founder of Amazon.com, which owns 29 percent of LivingSocial, recently announced plans to buy The Washington Post newspaper and affiliated publications.)
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