Groupon’s Board of Directors to Consider Dismissing Founder and CEO Andrew Mason
Groupon’s chief executive Andrew Mason might find himself ousted from his position as the board of the company considers a leadership change.
**Andrew Mason Willing to Step Down**
On Wednesday major news agencies reported that according to anonymous sources, the board of Groupon, which is due to meet on Thursday, plans to discuss dismissing Andrew Mason as the head of the company following the online group deals business’ disappointing performance over the last year.
When asked to comment on his possible ousting, Mason said he would fire himself if he weren’t suited to running Groupon. “It would be weird if the board wasn’t discussing whether I’m the right guy to do the job, and it’s their chief responsibility to ask that question,” Mr Mason said today at a conference in New York.
The 32-year-old CEO appears willing to step down if the board asks him to. “As the founder and creator of Groupon, as a large shareholder and as a customer who loves the product, I care far more about the success of the business than I do as my role as CEO.” However he also made a case that it is good to have “consistency” in Groupon’s leadership and said he has a strong preference to keep his position.
Shares in the daily deal business have lost 80 percent of their value since their initial public offering on 11 November as a result of the falling demand for online coupons. Many businesses, former clients of
Groupon, complained that customers attracted by temporary discounts rarely continued using their services after the deals expired. Mr Mason has attempted to push Groupon towards new opportunities, including retail sales, but his efforts have so far been fruitless. “He’s young, he’s inexperienced, he’s running a company which spans multiple countries all around the world, and he has no previous operating experience,” opined Sameet Sinha, an analyst at B. Riley & Co., as quoted by Bloomberg. A new CEO “with some gray hair could bring on some strong operational experience.”
!m[Declining Business for the Daily Deals Website Pushes LivingSocial to Reduce Workforce by 9 Percent](/uploads/story/928/thumbs/pic1_inline.png)Groupon’s share price (NASDAQ:GRPN) rose by 11.62 percent to close at $4.42 on the prospect of a leadership change.
**Layoffs at LivingSocial**
On 29 November Bloomberg reported that Groupon’s major rival LivinSocial is cutting 400 jobs across almost all divisions in an attempt to reign in costs. A source for the news agency, who has asked to remain anonymous as the information is not yet public, said that Eric Eichmann, president of the international business unit, will also be leaving the company.
Similarly to Groupon, Living Social has been struggling over the past year and has decided to cut its costs in order to boost profitability. In the third-quarter the company reported a $565 million (£353 million) loss on revenue of $124 million (£77 million). Amazon, which has a 29 percent stake in the coupon service business, announced a writedown of $169 million (£106 million) on its investment. The world’s largest Internet retailer acquired its stake in 2010 for $175 million (£109 million).