Groupon Deals with Declining Employee Morale

Despite exceeding analysts’ expectations in the first quarter, Groupon’s stock is trading at 63 percent below its initial public offering price of $20 per share. To add injury to insult, the Wall Street Journal is now reporting that Groupon’s sales force may be jumping ship as well.

Apparently, a Groupon attorney sent a letter to Mike Silagadze, CEO of Top Hat Monocle, Inc., accusing him of improperly recruiting Groupon employees to his educational software company. Silagadze insisted that he was merely benefiting from widespread employee dissatisfaction.

Are depressing headlines affecting worker morale? The employees might not all be shareholders, but the pressure to excel in the face of bad publicity and declining stock value seems to have trickled down from the top.

On Glassdoor.com, anonymous salespeople have complained of over-crowded territories, an ever-changing and unfavorable commission structure, and “ludicrous” sales goals. For anyone who has ever worked in sales, these are fairly common complaints.

But let’s take a look: Groupon’s salespeople make up 45 percent of the 12,000-person workforce, which now extends beyond the company’s Chicago headquarters to markets throughout North America, Europe, Latin America, Asia and other parts of the world.

In May, the company reported that it had served more than 100,000 merchants. With 5,400 salespeople, that’s an average of 18 customers per person.

According to WSJ, “Commissions shifted from a couple of percentage points of Groupon’s gross profit on each deal to a sliding scale under which employees made little on commission until they met or exceeded aggregate monthly profit targets, former employees said.”

Wrote one Glassdoor reviewer, “the glory days are over.”

The company is set to release its second quarter earnings on August 13.

Image by Red rockerz Design Studio via Shutterstock.

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