Groupon, the legacy discount e-commerce platform that rose to prominence in the early 2010s has now become the latest among the many companies that cited AI as their reason to fire hundreds of employees.
The company’s board approved a restructuring plan that will see mass layoffs at the company, according to a Form 8-K filing filed with the U.S. Securities and Exchange Commission (SEC) on May 21.
Groupon mentioned in the filing that it will reduce “up to 400 positions globally.” Those positions include both employees and contractors, and the cuts are expected to happen by the end of Groupon’s Q3 2026.
In a Schedule 14A Proxy Statement filed with the SEC on April 28, Groupon revealed that it had approximately 1,734 employees, which included “full-time, part-time, seasonal and temporary employees.” Groupon said that the figure excluded independent contractors.
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It is not known how many contractors are included in the workforce reductions of up to 400 individuals. If the layoffs only include the company’s employees, they would represent roughly 23% of its employed workforce.
Groupon emphasized that this is just the “initial phase” of the restructuring and that more changes are expected.
Groupon said in the filing that the layoffs were the first part of the company’s strategy to rebuild itself “as an AI-native company,” the goal of which is to “better deliver on our mission, serving both customers and merchants.”
The strategy has been named “Project Foundry.” In its earnings result, Groupon said Project Foundry is a “company-wide initiative to transform our operating model by embedding AI agents into the core of every function.” The e-commerce platform also said the initiative is “intended to enable the Company to operate with the speed required to succeed in an AI-native world.”
This would mean Groupon’s Project Foundry is the company’s attempt to use AI agents in place of human workers in everything from marketing to sales.
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Groupon said it expects its layoffs of around 400 workers to eventually save the company between $20 million and $25 million each year. Those cost savings are expected to be around $10 million to $12 million in 2026, with the company planning on reinvesting up to 50% of those savings this year “in marketing, AI infrastructure, and talent density.”
Groupon also said in its filing it “is currently evaluating additional material cost-reduction and automation actions related to Project Foundry.”
What those “automation actions” entail is unknown, but Groupon says that it “expects any such actions would be completed by the end of 2027.”
Recently, several companies have been citing AI-related plans as a reason for mass layoffs. Most recently, software company Wix announced plans to cut around 1,000 jobs amid AI transition. Financial software company Intuit also cut 3,000 jobs as it expands AI across TurboTax, Mailchimp, Credit Karma.