WASHINGTON (WUSA) -- LivingSocial, the DC-based daily deals company, confirmed that it is laying off 400 employees -- or around 10 percent of its workforce nationwide. Almost half of those cuts will be in the District.
LivingSocial is moving much of its customer service operations from D.C. to Tuscon -- where it opened a call center earlier this year.
This move is a sharp U-turn for the company. At the beginning of the year, the company was hiring multiple people a day -- and just opened another new office by the Convention Center, which is it's 6th location in DC.
This time last year, the company had an explosive 750 percent increase in hiring. In two years, LivingSocial went from 450 employees to 4,500. They say they need to catch their breath and industry watchers question the health of the daily deals business.
The job cuts come one month after Amazon.com reported a worse-than-expected losses -- due in part to its investment in LivingSocial. Competitor Groupon has seen the value of its share down 80% year-to-date.
The layoffs raise questions about the $32.5 million tax break the D.C. passed for LivingSocial earlier this year, particularly since those benefits have staffing level targets. LivingSocial tells the Washington Business Journal it still plans to pursue a consolidated headquarters in the District, a requirement to maximize that tax break, but it would likely have to hire locally to meet certain benchmarks for the tax break.