Another tech company has announced that it will lay off a significant number of workers in an effort to become “AI-native.”
This time around, it’s Groupon, the legacy discount e-commerce platform that rose to prominence in the early 2010s. Here’s what you need to know about Groupon’s layoffs and its “Project Foundry” AI plans.
What’s happened?
Last Thursday, the board of Groupon, Inc. (Nasdaq: GRPN) approved a restructuring plan that will see mass layoffs at the company. This information comes from a Form 8-K filing filed with the U.S. Securities and Exchange Commission (SEC) on May 21.
In the filing, Groupon revealed it will reduce “up to 400 positions globally.” Those positions include both employees and contractors, and the cuts are expected to happen by the end of Groupon’s Q3 2026.
The company is currently in its fiscal Q2 2026, which ends on June 30. Groupon’s fiscal Q3 runs from July 1 to September 30, which means the workforce reductions should occur by October.
In a Schedule 14A Proxy Statement filed with the SEC on April 28, Groupon revealed that it had approximately 1,734 employees, which included “full-time, part-time, seasonal and temporary employees.” Groupon said that the figure excluded independent contractors.
It is unknown how many contractors are included in the workforce reductions of up to 400 individuals. If the layoffs were to encompass only the company’s employees, they would represent roughly 23% of its employed workforce.
Groupon emphasized that this is just the “initial phase” phase of the restructuring and that more changes are expected.
As for why Groupon is cutting jobs—yes, you can once again blame AI.
Groupon’s AI-native “Project Foundry”
In its 8-K filing, Groupon said that the layoffs were the first part of the company’s strategy to rebuild itself “as an AI-native company,” the goal of which is to “better deliver on our mission, serving both customers and merchants.”
As is usually the case with this kind of corporate initiative, the strategy has a name: Project Foundry.
As announced in its earnings results on May 7, Groupon describes Project Foundry as a “company-wide initiative to transform our operating model by embedding AI agents into the core of every function.”
Additionally, it says the initiative is “intended to enable the Company to operate with the speed required to succeed in an AI-native world.”
In other words, Groupon’s Project Foundry is the company’s attempt to use AI agents in place of human workers in everything from marketing to sales.
In that regard, despite its name, Project Foundry is no different from what other legacy tech companies are doing as of late: looking for ways to replace humans with AI bots to save costs and, hopefully, increase sales.
And speaking of saving costs, Groupon said it expects its layoffs of around 400 workers to eventually save the company between $20 million and $25 million each year.
Those cost savings are expected to be around $10 million to $12 million in 2026, with the company planning on reinvesting up to 50% of those savings this year “in marketing, AI infrastructure, and talent density.”
In its 8-K filing, Groupon also said it “is currently evaluating additional material cost-reduction and automation actions related to Project Foundry.”
What those “automation actions” entail is unknown, but Groupon says that it “expects any such actions would be completed by the end of 2027.”
Groupon’s stock rises on AI-native push
Investors lately have tended to reward these types of AI-driven pivots, and so it’s little surprise that Groupon’s stock price is rising after the news of AI-driven layoffs.
Yesterday, GRPN stock surged more than 9% to close at $20.69—a high for the year. As of the time of this writing, in premarket trading this morning, GRPN shares are up another 1.4%.
Based on the company’s closing share price yesterday, Groupon’s stock is now up over 17% in 2026. However, the company’s stock price is still down around 22% over the past 12 months.
And looking back even further, things are much worse for the company’s stock price. Groupon was one of the early 2010s internet darlings, and the company went public in 2011.
But in the time since, the stock has fallen by more than 96% as Groupon’s popularity waned. Now the company is clearly hoping that an “AI-native” push could see it reclaim some of its lost glory. But whether that happens, as with all things AI, remains to be seen.
