So, LivingSocial is cutting more than half of its workforce, laying off 85 people in its Washington office and more than 280 countrywide, and outsourcing its customer service call center — something that I’m sure will go well with people trying to straighten out a snafu while out on a hot date.
At one point, it had more than 1,000 employees in D.C. alone, and 4,000 worldwide; it’s now down to 200. Its CEO, in classic double-speak, said, “While it is never easy to say goodbye to talented colleagues, we believe we are now in a more stable position to invest in the next stage of our journey.” For ex-employees, of course, that journey involves a trip to the parking lot with a box of their things and an expedition to the unemployment office.
The whole idea of “daily deal” websites has taken a large hit recently, for good reason. Merchants who signed up for deal offerings found themselves with customers more interested in one-time offers who rarely became repeat patrons while watching half of their profit go to the website. Deal buyers had their credit cards hit immediately, with no refund if you didn’t use the offer in a timely fashion, or if they read the fine print too late to realize that more than “certain restrictions may apply.”
And pretty much everyone was tired of the constant drumbeat of emails.
In September, Groupon announced layoffs of 1,100 people, or about 10% of its workforce. It also shut down operations in seven countries, following earlier closures in Greece and Turkey, and a selloff of a division in South Korea. Its CEO also blathered about “engineering its next chapter.” While leaving Greece might be a good idea (Parthenon for sale at half-price, but watch out for the upkeep), closing international operations that made up more than 40% of revenue shows a particular desperation.
Groupon became briefly famous in 2010 for rejecting a $6 billion buyout offer from Google, thinking it could become more profitable on its own. It then went public in November of 2011 — and its stock price has declined more than 80% since the IPO. Ouch.
For further evidence of the trend, look at Ideel, a “flash-sale” website catering to “fashionistas looking to snatch up high-fashion looks at steep discounts.” It laid off 63 New York City employees and headed off to Groupon’s Chicago office. Oh yes, Groupon had purchased Ideel in 2014 for $43 million, and had just expanded in June to Canada, the U.K., Australia, France and Germany. Great timing there.
Ideel had great talent in snatching up something anyway: venture capital. It absorbed more than $107 million in venture capital since 2007. Titanic, meet iceberg.
Ideel’s clients complained that originally they had been made to feel special, but now it just made them feel cheap. Probably as good a summation of the daily deals phenomena as any.
Ugly, Ugly, Ugly
If you’re not familiar with the term “ransomware,” you’re leaving yourself vulnerable to a particularly ugly form of computer infection.
Spread, as is common, by hidden code in otherwise safe websites, or by links spread by email, it takes advantage of Windows and other systems software’s built-in ability to encrypt files. This goes back to the old spy-novel days (or World War II) where files could be encrypted with a “key,” then transmitted or saved with no way to view them unless you had the exact key. Ransomware burrows into your file system and encrypts every document, Excel spreadsheet, picture file and database — then splashes up a screen announcing its success and inviting you to buy the key from the hijackers. Payment is usually required in Bitcoin or a type of untraceable gift card.
Unfortunately, not even the usual virus-checkers catch it well. In one recent instance, a client using McAfee (and keeping it up-to-date with daily updates) was hit. It spread from the particular workstation to the server, encrypting all their accounting database files. The thing that saved them was a 12-year-old tape backup system (buy quality and it lasts) and a year-end backup tape. Plus more than a few hours work. Ugly, ugly, ugly.
The most common form is called Cryptolocker, and was often announced by a screen accusing the user of visiting porn sites or sites listed by the FBI as terrorist, etc., and offering to unlock their files so no one will know. For a price, of course.
Originally spread by eastern European groups, it has hit hospitals and city systems for payroll and police records, as well as countless individuals. Many times people will pay up, thinking that a few hundred dollars is cheaper and easier than the often impossible task of trying to decrypt the files. But the creators are targeting businesses and metropolitan systems now and upping the ransom to thousands of dollars.
What to do to protect yourself? Besides the usual wariness of unexpected emails and web links, probably the best defense is off-site backup. Many firms offer services for as little as $5 a month. I also counsel businesses to buy at least two external hard drives, preferably identical units that can be easily swapped out, and do backups to them.
Weekly (or less) units are swapped and one is taken home or put in your trunk. That’s also a good approach if your firm is burglarized and they steal your equipment, including the backup drive. And yes, I’ve seen that happen.
It’s ugly out there.
Cliff Feldwick is owner of Riverside Computing, which offers PC troubleshooting, network setups and data retrieval for small businesses, when not avoiding “a deal for you.” He can be reached at 410-880-0171 or at email@example.com. Older columns are online at http://feldwick.com.