Recently, Groupon’s joint venture in China, Gaopeng.com has announced its decision to close offices in 13 cities, and around 500 employees will be put into unemployment.

According to a lawyer consulted by the laid-off workers, Zhao Zhanling, at least 13 offices including Qinhuangdao, Yantai, Nanning, etc., are removed, and 18 offices in Shanghai, Hangzhou, Wuhan, Fuzhou etc., are faced with a moderate lay-off.The total number of laid-off employees has come down to around 500, which is qualified for an arbitration. Besides, it is notable that Gaopeng has not yet released any formal notice or sent any email about how the compensation will go.

Zhao is preparing the materials for the arbitration. He said, the progresses in different places are not the same. In Tianjin, Tangshan and Qinghuangdao, employees were informed that they would receive pay of half month as compensation, while in Shanghai, 50 workers in editorial department and some other 60 employees, 110 in total, have managed to negotiate with Gaopeng and achieve a better solution with 2-month pay as compensation. Nevertheless, the pay does not include allowances for transportation and accommodation, and Zhao said they would launched another negotiation. Meanwhile, employees in Taiyuan city have also talked with Gaopeng and achieved the same compensation with their Shanghai counterparts. As to workers in Beijing, they are keeping contact with Zhao to settle down a satisfying solution.

On the other hand, Gaopeng.com has admitted that the mass lay-off is for the optimization of its business, and that more resources will be allocated to offices in middle to large size cites. The company also claimed that it will give a compensation which exceeds what the law require. But Zhao said, there is still no formal announcement how the compensation plan is arranged.

A professional Sun Jie indicated that, the mass lay-off was the result of crazy expansion in preliminary phase. Online coupon companies’ craze on expansion has led to underperformance and they are faced with difficulties in raising funds and profitability. Thus, mass lay-off becomes the only solution.

About Groupon

Groupon (a portmanteau derived from “group coupon”) is a deal-of-the-day website that features discounted gift certificates usable at local or national companies. Groupon was launched on November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto. As of October 2010, Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 35 million registered users.