Chicago's start-up darling Groupon just can't get a break. The granddaddy of daily deals has been getting slapped around by the media ever since it announced its IPO intentions. It hasn't helped that the company, including its very public CEO Andrew Mason, have faced quite a few PR disasters, such as the discovery that the company's finances seem a little fishy. There were also a couple loud slip-ups during the SEC's mandatory quiet period, and the highly publicized exit of several key employees. Now the company, formerly speculated to draw a $30 billion valuation, has been priced at $10 billion, which is still nothing to sniff at. (Based on Mason's percentage of ownership in the company, he's worth about $750 million.) But just as Mason gets ready to attract investors via his Groupon roadshow, murmur of a shift in morale and corporate culture are beginning to leak from within.
The most visible signs of cultural change involve Groupon's large sales force, the revenue engine of the deal-making machine. Recently, Mason revealed that the company will be laying off the 10-percent lowest performers on its sales staff in an effort to promote growth. Additionally, a former Groupon sale rep filed a class-action lawsuit against the company in September alleging unpaid overtime. And then on Oct. 21, Groupon filed a lawsuit against two former sales managers who left the company in September to work for Google's daily deal venture.
But there's more. If you look at GlassDoor.com, a site that allows current and former employees to rate and review their employers, another piece to the Groupon story begins to unfold. Employee reviews were overwhelmingly positive up until August 2011. At that point, many posters, some identifying themselves as members of the sales staff, began railing against the company. Here are some choice quotes:
- Grab your headset, get ready to call and call and then do some more calling. That's all you will do. - former Groupon Sales Rep
- Used to be a fun culture. Now it's all about the bottom line and feels like your typical call center. - former Groupon Account Rep
- Poor work/life balance, I'd often work 60+ hours a week. - former Groupon Account Executive
- Cut commissions and eliminated bonuses. Sales staff make about 80 percent less than they did 5 months ago. - current Groupon Account Executive
- This used to be a fun, work-hard/play-hard place and the culture supported creativity and relationships. Now its about how many calls can you make, close deals - and nothing is ever good enough. - current Groupon Account Executive
- Not focused on win-win-win (merchant-customer-Groupon) anymore. All about [money]. This used to not be the case. We structured win-wins, but now it's all about what's best for Groupon. - current Groupon Account Executive
- I started here about 4 months ago and was surprised how quickly things went downhill. Being so excited to work here and be able to help businesses was great. Now the types of deal structures we are forced to do are not in the best interest of the businesses. - current Groupon Sales Rep
- Change in senior management and new sales management approximately 2 months ago. Since then it's been [a] horrible work environment. Everyone is miserable and they treat the customers (merchants) as well as employees with little respect. All they care about is how much money Groupon makes. - current Groupon Account Manager
A number of past and current employees cited the change in management as the root of the morale problem. They are referring to Senior Vice President of Sales Christopher Muhr, who took on the role in August of this year. Based on this in-depth story from Business Insider, Muhr represents a different business culture for Groupon, one that focuses more shrewdly on growth and the bottom line. If the cultural change is a conscious one, it's completely understandable given the pressure for Groupon to expand in light of its IPO. But does that mean the "fun" Groupon is a thing of the past?
For the record, I know a number of people who work at Groupon. Some fulfill very high-level roles, while others fulfill very low-level roles. I would say half are extremely satisfied with their jobs, while the other half are extremely dissatisfied. Mind you this is all anecdotal information and does not represent the morale of the 10,000-person staff as a whole. But those who do complain about the corporate culture echo the sentiments of the anonymous posters on GlassDoor.com, which for me lends weight to the statements.
Growing pains are an inevitability when it comes to operating a start-up. But Groupon is a special case. It's a baby, but it's pretty much the biggest baby in the history of babies. So perhaps its growing pains should be expected to parallel the proportions of its size. If this is true, the sales force, and other staff, may want to pop some aspirin cause it looks like it's going to be a bumpy ride.