The daily deal bubble is bursting. First, Groupon is having leadership troubles (amid other problems) with rumors that the CEO is being forced out.
Now, one of its prime competitors, LivingSocial, is reportedly laying off approximately 400 of its employees to maintain profitability.
Initially reported by the Washington Business Journal, AllThingsD is now reporting that it has confirmed that the online marketplace is cutting its workforce back by roughly nine to 10 percent in an effort to maintain -- or at least generate -- a profit.
Bloomberg added that Eric Eichmann, president of the international business unit, is also departing the company.
Given that, unlike Groupon, LivingSocial is not a public company, we don't have exact knowledge of the financials of the company.
However, given that the daily deal craze has died down considerably in the last two years, it makes sense that the Washington, D.C.-based operation needs to restrategize its business model going forward. So don't expect LivingSocial to declare an IPO anytime soon.
According to AllThingsD's report, less than half of the pink slips were handed out at the D.C. offices, mostly within the customer service, editorial and administrative units. The rest of the layoffs occurred at other LivingSocial offices worldwide.