Layoffs have continued with another tech company saying it was cutting people to enable it to use more artificial intelligence.
Groupon announced in a security filing this month that it will cut up to 400 jobs, or nearly 25% of its worldwide workforce, as part of a broader restructuring plan to make the platform AI-native. The Chicago company plans to carry out the layoffs in the coming months.
Earlier the company’s Chief Executive Officer Dušan Šenkypl had said the company “fell short of our expectations” last quarter.
Since 2022, more than 800,000 tech workers have been laid off, according to Layoffs.fyi, a website that tracks job cuts.
The surge in pink slips started in 2023, when companies that had gone on hiring sprees during the COVID-19 pandemic began to cut back. From January to April this year, U.S. tech employers announced 85,411 job cuts, up 33% from the same period last year, according to global outplacement and executive coaching firm Challenger, Gray & Christmas.
Groupon said in the filing that the decision to shift toward an AI-based company is to “better deliver on our mission, serving both customers and merchants.”
The company said the layoffs will cost it as much as $13 million, but save it more than $20 million per year.
This announcement comes as many e-commerce companies are shifting their business models to AI to reduce costs by automating many roles.
Artificial intelligence has also triggered fierce competition for top talent and is also fueling tens of thousands of layoffs this year. The result is that the class divide is widening in Silicon Valley as a tiny group of employees are landing unprecedented packages for AI skills, while many others struggle to find work.
The have-nots are doing everything that used to guarantee great jobs — refreshing resumes, optimizing LinkedIn profiles and doing interviews — but companies are much more picky these days. The tech jobless are rethinking their lives. Some are taking pay cuts, while others are leaving tech. Some are going back to study or launch startups. Some have retired.
Groupon shares, which have fallen 27% over the last 12 months, slipped 1% on Thursday to $21.20.
