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Layoffs Hit Groupon's Restaurant Software Unit as Breadcrumb Founder Leaves

Groupon laid off about 20 employees, or somewhere between 20 percent and 25 percent, from its Breadcrumb software division.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Earlier this year, Groupon considered spinning off its restaurant software business, Breadcrumb, as Re/code previously reported. But Groupon has decided to hold onto the business for now, according to sources, and some big changes have happened as a result.

First, Breadcrumb founder Seth Harris, who has run Groupon’s restaurant software and payments business since his startup was acquired in 2012, has left the company. At the same time, Groupon has cut about 20 positions in the Breadcrumb unit, according to a spokesman, out of about 80 to 100 people that sources say worked in the group.

In a statement, Groupon’s Bill Roberts said, “Breadcrumb is a great business, and we’ve made some operational changes to better position it for accelerated growth. There were some position eliminations as we chose to reallocate resources to other areas.” Rudd Davis, who joined Groupon last year in the acquisition of his startup, Swarm Mobile, is replacing Harris.

Harris told Re/code he was ready to do something different after working on Breadcrumb for four and a half years, but he hasn’t decided on what he’ll do next.

“I’m extremely proud of what our team accomplished,” he said. “Point of sale is an extremely hard business to deliver exceptional product at a great value with a great experience. I believe we nailed that with Breadcrumb at Groupon.”

Breadcrumb competes in a crowded space against other makers of checkout software such as big players Micros and First Data and startups such as Revel, Shopkeep and Square. It tried to differentiate itself, in part, by focusing heavily on restaurants and other types of eateries.

Part of the thinking behind the acquisition of Breadcrumb was that it would allow Groupon to build closer relationships with small businesses and make it easier for them to redeem Groupon deals, which might lead to their doing more business with Groupon. Breadcrumb, however, also has a host of high-end restaurants as customers who don’t regularly do business with Groupon beyond their software and payments relationship. It’s not clear why Groupon has decided to hold onto the business after talking to potential acquirers earlier this year about a partial spinoff or sale.

Over the past few years, Groupon has looked to evolve from solely a daily-deal business reliant on email offers to one that also sells products on its marketplace. But the transition has been bumpy, and Groupon’s stock is currently trading at its lowest point in more than two years.

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