Groupon will fire the worst 10 per cent of its sales staff and replace them with new employees, Groupon CEO Andrew Mason told investors in Boston as a part of the IPO roadshow.Mason said he wanted Groupon to sign on more high-value merchants, which would require better sales people, according to a report by Reuters.
As a result, around 480 of Groupon’s employees — based on the 4,800 sales staff count in the company’s most recent IPO filing — are about to lose their jobs.
Mason is following in the footsteps of Jack Welch, the legendary CEO of GE, who cut the bottom 10 per cent of his staff. (Other executives including Steve Jobs and Reed Hastings have also talked about cutting out anyone who isn’t an “A” player.)
Mason has pressured his sales staff to produce extremely steep discounts and hit very high targets. That’s become increasingly difficult now that there are a huge number of daily deals providers on the market. If Groupon is asking for too steep a discount, a merchant can just go to a competitor like LivingSocial for a better offer. Some employees have also said Groupon’s sales staff is “miserable”.
Now there’s even more pressure on the sales staff that has made itself seem chronically overworked under Mason.