Groupon Cuts 400 Jobs to Fund AI Pivot

Groupon plans to eliminate 400 positions globally as it rebuilds itself as an artificial intelligence (AI)-native company.

The positions eliminated as part of the firm’s restructuring plan will include both employees and contractors, and the cuts will occur by the end of the third quarter, Groupon said in a Monday (May 26) current report filing with the Securities and Exchange Commission (SEC).

Groupon said in the filing that the restructuring plan approved Thursday (May 21) by the company’s board of directors relates to the company’s “previously announced strategy to rebuild the Company as an AI-native company and better deliver on our mission, serving both customers and merchants.”

The company expects to incur pre-tax charges of $7 million to $13 in connection with the restructuring, and it expects the payroll actions to deliver annualized cost savings of $20 million to $25 million, according to the filing.

With the $10 million to $12 million of gross savings it expects to realize in 2026, Groupon intends to reinvest as much as half of the savings in marketing, AI infrastructure and talent density, per the filing.

“As part of this restructuring plan, the Company is currently evaluating additional material cost-reduction and automation actions related to Project Foundry, which would be subject to Board approval,” Groupon said in the filing. “The Company expects any such actions would be completed by the end of 2027.”

Project Foundry is an initiative in which Groupon is embedding AI agents into the core of every function across the company, enabling it to “operate with the speed required to succeed in an AI-native world,” the company said in a May 7 earnings release.

Groupon CEO Dusan Senkypl said in the release that every team across the company was adopting AI, but that the company’s first quarter results did not yet reflect that work.

Groupon eliminated 500 jobs in January 2023, saying that it was in the midst of a restructuring plan that was approved by its board of directors that month as well as a cost savings plan that was announced in August 2022.

Groupon also reported in the filing that its chief operating officer, Jiri Ponrt, notified the company Thursday that he will resign from the company effective July 10.