LivingSocial Fires Workers, Then Realizes It Still Needs Them
The 30 workers were part of the Washington, D.C., events department, known as "Adventures," according to the report by the Washington Business Journal. As a result, the company is closing its New York offices, and remaining staff members have been asked to work from home, as Entrepreneur magazine, a trade publication for small business owners, reported. A day after shutting down the entire department, management realized that it still had a handful of events scheduled, and some actual people were needed to make them happen. So the company informed the workers they'd be expected to work until July 24.
In an interview with AllThingsD, LivingSocial spokesperson Sara Parker acknowledged that the company may not having handled the layoffs flawlessly. "There's not a one-size-fits-all experience, but I'm not disputing the fact that there might have been some confusion," said Parker.
The decision to close the division qualifies as a serious disappointment; Adventures was launched in 2011 in 30 cities. But it may have been inevitable. In the last year, LivingSocial registered a net loss of $650 million.
LivingSocial is no newbie to the layoff game. Last November, the company let go of 400 full-time workers, as the Washington Business Journal reported at the time. That round was the first in the history of the company, which was founded in 2007 as a Facebook application. After its founding, LivingSocial found a niche offering ticket deals for touring events like Cirque de Soleil and Tough Mudder. But LivingSocial may have bit off more than it could chew after early successes and undertook a "frenzied headcount expansion" to a total of about 5,000, in the words of the Washington Business Journal and needed to cut back.
Its transformation into a two-faced employer has left it seeking more help. Amid all the back and forth with the 30 full-timers, the company has also been trying its best to bring on part-time workers to make sure the remaining work gets completed, as AllThingsD reported.
And the company might not be done yet. Once all the local events are finally completed, dozens of part-time workers will also be laid off on October 1, according to the Entrepreneur report.
Layoffs, of course, are rarely handled in such a manner, but are on the rise throughout the economy. It's not even uncommon for companies that are profitable to undergo a round of layoffs, or for companies to make any formal announcement about the bloodletting. Instead, companies including Pfizer and Lockheed Martin are seeking to quietly remove workers in what's known as the "stealth layoff."
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Dan Fastenberg was most recently a reporter with TIME Magazine. Previously, he was a writer for the Thomson Reuters news service's Latin America desk. He was also a reporter and associate editor for the Buenos Aires Herald while living in South America.
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