Shares of Groupon (NASDAQ:GRPN) rose 5% on Tuesday after the company announced a major restructuring initiative that includes global workforce reductions and improved full-year earnings guidance.
Company plans up to 400 job cuts worldwide
Groupon said its board approved the restructuring program on May 21, with plans to eliminate up to 400 positions globally.
The reductions will affect both employees and contractors, with most of the cuts expected to be completed by the end of the third quarter.
The company said the restructuring is tied to its transition toward a more AI-focused operating model, although implementation timing may vary depending on legal requirements in certain regions.
Restructuring expected to deliver significant cost savings
Groupon estimates the restructuring will generate charges ranging from $7 million to $13 million, primarily linked to severance payments and employee compensation costs.
The company expects the workforce reductions to produce annual savings of between $20 million and $25 million.
For 2026, Groupon projects gross savings of approximately $10 million to $12 million and said up to half of those savings could be reinvested into marketing, artificial intelligence infrastructure and talent development initiatives.
Net savings for fiscal year 2026 are estimated at roughly $5 million.
Full-year EBITDA guidance raised
Alongside the restructuring announcement, Groupon increased its full-year adjusted EBITDA guidance.
The company now expects adjusted EBITDA between $75 million and $80 million, compared with its previous forecast range of $70 million to $75 million.
Groupon also said restructuring-related costs will be excluded from its non-GAAP financial metrics.
Additional automation initiatives under review
The company disclosed that it is evaluating further automation and cost-reduction measures through an initiative known as “Project Foundry.”
Any additional actions under the program would require board approval and are expected to be completed by the end of 2027.
COO to step down in July
Separately, Groupon announced that Chief Operating Officer Jiri Ponrt will resign effective July 10.
The company said his departure is not related to any disagreement with management or the board and confirmed that he will not receive severance compensation because the resignation is voluntary.