The CEO of D.C.-based LivingSocial Inc. announced Thursday that the online coupon company will lay off 160 workers in the District. In all, 400 employees—about nine percent of the company’s workforce—have been terminated around the country, primarily in sales and customer services.
But what does this mean for the company’s relationship with D.C?
Back in July the D.C. council unanimously approved a $32.5 million tax break for the company as part of Mayor Vincent Gray’s effort to boost the city’s tech community. In order to cash in on the tax breaks, the company would need to add 1,000 local employees and consolidate its D.C. workforce into a single building of at least 200,000 square feet by 2015. Subsequently, the company would need to add 50 employees annually until 2025.
Although the prospects for meeting these criteria now seem difficult, the Washington Business Journal reports that LivingSocial still plans to cash in on the tax breaks. A spokesman told WBJ that it expects to cut workers in certain areas and add in others and ultimately to consolidate its local workforce into one building.
On News Channel 8 Thursday, Mayor Gray said; “We think LivingSocial has a very bright future,” Gray said. “I think they will continue to be an important part of our economy in the city.”
The online coupon industry—which also includes the struggling pioneer Groupon—has received criticism for expanding too rapidly before it perfects its business model. The Wall Street Journal has an interesting piece about what went wrong with LivingSocial’s plan.
* Bolling on what might have been
* D.C. ranks last in nation in graduation rate (although it should be noted that D.C. is the only completely urban school system.)
* The most awesome gifs of Joe Biden going to D.C.'s brand new Costco
* D.C. joins states on synthetic drug ban
* D.C. Council committee approves $11 million tax break for Howard Town Center, despite District CFO saying the break is unnecessary.
* Tanger Outlet mall chain breaks ground near National Harbor
* Gov. O'Malley touts Maryland's climate efforts while appealing for federal to get wind turbines building in Ocean city
* Special election to fill at-large D.C. Council seat set for April 23.