Black Friday weekend was bleak for daily deal sites.
LivingSocial announced on Thursday that it is laying off 9 percent of its work force, or 400 employees, from the struggling venture.
But it’s not as if consumers aren’t spending this holiday season — they are. They’re just not doing it from daily deals sites, and haven’t for a while.
According to PrivCo’s CEO, Sam Hamedeh, “So far, LivingSocial has missed all its holiday sales targets.”
And its investors just aren’t willing to continue funding the venture, to the tune of $814 million, according to PrivCo.
This comes just after Amazon, which owns roughly 30 percent of LivingSocial, announced the site’s overall net loss of $566 million in its latest quarterly earnings. As a result, Amazon suffered a $274 million net loss, lowering the estimated worth of LivingSocial to just $94 million.
This is an astonishing 94 percent down from its $5.7 billion valuation just one year ago for CEO Tim O’Shaughnessy.
In fact, according to a recent survey conducted by BIGinsight, the National Retail Federation reports that a cool 247 million shoppers visited stores and websites over this year’s Black Friday weekend, compared with 226 million in 2011.
Further, online spending per consumer also increased by 37.8 percent, with an average $172.42 spent online. This marks 40.7 percent of total consumer spending for the biggest shopping weekend of the year.
But just a small percentage, slightly over 7 percent, reported looking at group-buying websites like Groupon and LivingSocial for Black Friday weekend promotions and sales.