Groupon Layoff 2026: What Employees Need to Do This Week

A layoff notice from Groupon starts five time-sensitive clocks that most employees don't know about. On May 27, 2026, Groupon announced it was cutting roughly 400 positions, close to 25% of its total workforce, as part of a strategic shift toward AI-driven operations. If you received a notice, the decisions you make in the next few weeks carry real financial consequences. This article walks through each deadline in the order it matters.

What happened

Groupon announced roughly 400 layoffs on May 27, 2026, representing close to 25% of the company's total headcount.¹ The company described the cuts as part of a strategic shift toward AI-driven operations. Severance terms have not been publicly disclosed.

What should you do about health insurance?

Health insurance is the most urgent financial decision you're facing right now. Losing your job means losing employer-sponsored coverage, and you have two options: COBRA or the ACA Marketplace. The wrong choice can cost you hundreds of dollars a month. The right one depends on your income, your health needs, and how your income is likely to change this year.

COBRA lets you stay on your current Groupon plan. You pay the full premium, which is what you were paying plus what Groupon was paying, plus a 2% administrative fee. The average individual COBRA premium runs $703 per month in 2026.² Most people paying $150 a month through payroll will see a bill close to $700. Family coverage runs significantly higher.

You have 60 days from your qualifying event to elect COBRA.³ The election is retroactive, meaning you can wait to see if you need care before committing. But if you have ongoing prescriptions or a scheduled procedure, elect immediately and reassess from there. Waiting too long without a plan is how people end up paying full out-of-pocket costs on a gap in coverage they didn't mean to have.

The alternative is the ACA Marketplace. Losing employer coverage is a qualifying life event that opens a 60-day Special Enrollment Period.⁴ Marketplace plans are often cheaper than COBRA, particularly if your income drops significantly this year. Log in to healthcare.gov or Illinois's GetCoveredIllinois portal to compare plans and premiums based on your income and family size.

One important constraint: you choose one or the other. You can't elect COBRA and then switch to a Marketplace plan mid-coverage period without a separate qualifying event. The Decision Calendar calculates the COBRA vs. Marketplace cost comparison for your specific income level so you can make this call with actual numbers.

Should you sign your severance agreement right away?

No. Don't sign it the day it arrives. This isn't a negotiating tactic. It's a federal legal right, and you shouldn't give it up.

Groupon laid off roughly 400 people in one action. That makes this a group termination program under the Older Workers Benefit Protection Act (OWBPA). If you're 40 or older, you have 45 days to review the agreement, not 21 days, which is the window for individual layoffs.⁵ You also have 7 days after signing to revoke your signature, for any reason, with no penalty.⁶ Neither of those rights can be shortened or waived by anything in the agreement itself.

If you're under 40, OWBPA doesn't apply, but a careful review still makes sense. Here's what to look at: the total severance amount and the payment schedule, any non-compete or non-solicitation clauses and their geographic scope, which legal claims you're agreeing to waive, and any language that touches your equity grants.

Groupon hasn't publicly disclosed what's in these agreements. That means terms may be negotiable. The things most commonly negotiated in tech layoff packages: the total dollar amount, the payment structure (lump sum vs. installments affects which tax year the income lands in), continued benefits coverage through a specific date, and the scope of any non-compete restriction.

You don't need a lawyer for a basic review, but if the package is large or the non-compete clause is broad, a one-hour employment attorney consultation is often worth it. Many offer free initial consultations. Use the free checklist to make sure you've covered everything before you put pen to paper.

What happens to your equity?

Groupon is a publicly traded company, so how your equity is treated at termination is worth understanding carefully before any clocks expire. What you hold, and when it was granted, changes what you need to do and how fast.

Incentive Stock Options (ISOs): If you hold ISOs, you have 90 days from your termination date to exercise them and keep ISO tax treatment under IRC Section 422.⁷ After 90 days, unexercised ISOs convert to Non-Qualified Stock Options (NQSOs). NQSOs are taxed as ordinary income on the date of exercise, rather than qualifying for potential long-term capital gains treatment. Mark your 90-day deadline now.

There's also an AMT consideration with ISOs. Exercising ISOs doesn't trigger regular income tax, but it does create an AMT preference item. If Groupon's stock price is meaningfully above your strike price, exercising a large ISO grant can produce a significant AMT liability in the year you exercise. Run the numbers before you act.

RSUs: Unvested RSUs typically forfeit on your termination date. Check your grant agreement for any acceleration provisions. Some companies include provisions that accelerate vesting for employees affected by a company-initiated layoff, particularly for employees with longer tenure. Contact Groupon's stock plan administrator directly to confirm your specific situation rather than assuming either way.

Already-vested shares: Shares you already own from past RSU vesting are yours and there's no exercise deadline to worry about. Be aware of any post-termination trading restrictions and ask the stock plan administrator when those lift.

How do you file for unemployment in Illinois?

Unemployment insurance (UI) is a state-administered benefit for workers who lost their jobs through no fault of their own. A company-wide reduction qualifies. Illinois's maximum weekly benefit is $595 per week for a worker without dependents as of 2026.⁸

File immediately. Illinois doesn't backdate claims to your last day of work. The week you file is week one. If you wait two weeks to get around to it, those two weeks of benefits are gone permanently.

File at ides.illinois.gov. You can apply online or by phone. You'll need your Social Security number, your employment history for the past 18 months, your last employer's name and address, and your bank account details for direct deposit.

Illinois requires identity verification through ID.me as part of the claims process. Create your ID.me account before you start the application to avoid delays. If you run into problems with ID.me, IDES has a dedicated phone line for identity verification issues.

After your initial filing, you'll need to certify your eligibility each week to receive payment. Missing a certification week means losing that week's benefit. Set a recurring weekly reminder for the day your certification is due.

What about taxes on your severance?

Severance is taxable income. The federal government withholds at the supplemental wage rate of 22% on severance payments up to $1 million.⁹ That 22% is a withholding rate, not your final tax rate. If your total 2026 income puts you in a higher marginal bracket, you'll owe the difference when you file.

Timing matters. If Groupon pays your severance this month, it lands in Q2. The Q2 estimated tax deadline is June 15, 2026.¹⁰ If severance arrives in July, August, or early September, it falls in Q3, with a deadline of September 15, 2026.¹¹ If your withholding on the severance doesn't cover your full tax liability, you may owe an underpayment penalty on top of the tax itself.

This is most relevant if you have significant investment income this year, you were in a high income bracket before the layoff, or you're also exercising equity. If any of those apply, run a rough estimate now. The IRS withholding estimator at irs.gov can give you a ballpark.

One more thing: if your severance is structured as installments rather than a lump sum, the payments may spread across two tax years. Whether that helps or hurts depends on what your income looks like next year. It's worth thinking through before you agree to a payment schedule.

What should you do with your 401(k)?

Your 401(k) balance stays in Groupon's plan until you take action. You have three realistic options.

Leave it in the plan. If your balance exceeds the plan's cash-out threshold, Groupon generally can't force you out. You keep your existing investment options but can't make new contributions.

Roll it to an IRA. A direct rollover from the plan to an IRA is tax-free and has no time limit. Always request a direct rollover. If you take the cash yourself instead (an indirect rollover), you must deposit the full original amount into an IRA within 60 days to avoid it being treated as a taxable distribution.¹² Groupon will withhold 20% for taxes on a direct cash distribution, which means you'd have to fund that 20% gap out of pocket to complete a full rollover. A direct rollover sidesteps this entirely.

Roll it to a new employer's plan. If you land a new job, you can usually roll your Groupon 401(k) into the new employer's plan. That keeps everything in one place.

Don't cash out unless you have no other option. A cash distribution is taxable income plus a 10% early withdrawal penalty if you're under 59.5. That's a large, permanent cost that's hard to recover from.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Decision Calendar

The deadlines above apply whether or not you are tracking them. The Decision Calendar from Layoff HQ is not just a reminder tool. Based on your last day worked, your state, your age, and whether you have equity, it calculates: the COBRA vs. Marketplace cost comparison for your income level, your severance tax exposure and estimated Q2 or Q3 payment due, your equity exercise costs and the tax difference between acting before and after key deadlines, and your financial runway. Then it tracks every deadline on a single personalized calendar and sends SMS and email reminders before each one closes. One-time purchase. No subscription. 14-day money-back guarantee.

Build your free Decision Calendar or see pricing for the full personalized version.

1. Chicago Tribune. "Groupon laying off 400 employees, nearly 25% of its workforce in AI shift." May 27, 2026. https://www.chicagotribune.com/2026/05/27/groupon-laying-off-400-employees-nearly-25-of-its-workforce-in-ai-shift/
2. KFF. "Health Policy 101: Employer-Sponsored Health Insurance." https://www.kff.org/health-policy-101-employer-sponsored-health-insurance/
3. U.S. Department of Labor. "COBRA." https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra
4. HealthCare.gov. "Special Enrollment Period." https://www.healthcare.gov/sep-list/
5. EEOC. "Age Discrimination in Employment Act." https://www.eeoc.gov/laws/statutes/adea.cfm
6. EEOC. "Age Discrimination in Employment Act." https://www.eeoc.gov/laws/statutes/adea.cfm
7. IRS. "Publication 525 (Taxable and Nontaxable Income)." https://www.irs.gov/forms-pubs/about-publication-525
8. Illinois Department of Employment Security. "Eligibility." https://ides.illinois.gov/unemployment/eligibility.html
9. IRS. "Publication 15 (Employer's Tax Guide)." https://www.irs.gov/publications/p15
10. IRS. "When to Pay Estimated Tax." https://www.irs.gov/businesses/small-businesses-self-employed/when-to-pay-estimated-tax
11. IRS. "When to Pay Estimated Tax." https://www.irs.gov/businesses/small-businesses-self-employed/when-to-pay-estimated-tax
12. IRS. "Rollover Chart." https://www.irs.gov/retirement-plans/plan-participant-employee/rollover-chart