LivingSocial—-D.C. daily deals giant and great white hope of the city’s tech tax break program—-will start laying off as many as 400 employees tomorrow, the Washington Business Journal‘s Bill Flook reports.

It’s not clear yet how many of the lost jobs are in the District, but there will definitely be some in the area, according to the Business Journal. LivingSocial has at least 4,500 employees, according to its website, meaning the cuts could represent at least an 8 percent workforce reduction.

A LivingSocial spokesman decline to comment to the Business Journal, and haven’t responded to an immediate request for comment from City Desk.

The Business Journal points out that this could complicate the company’s $32.5 million tax break program, which requires LivingSocial to increase its number of employees in the District to receive the entire amount.

Still, the cuts can’t come as a big surprise, given LivingSocial’s pullbacks in other regions and large writedowns on purchased businesses. For more on LivingSocial’s corporate culture and its business challenges, check out Washington City Paper‘s recent cover story  “Living LivingSocial,” where the comments are still humming with debate about the company—and rumors of impending layoffs and other moves.

And speaking of the comments, they prompted a company-wide email from CEO Tim O’Shaughnessy shortly before Thanksgiving, where he promised a “full operational update to the company in the coming weeks.” Read the full email, which City Paper obtained last week, below:

LivingSocialites,

I am sure most of you have read the recent City Paper article and associated comments, many of which are from employees. Clearly I and the rest of the exec team have read and been following things over the last week or so. My perspective is the comments a) contain constructive criticism that have merit, but b) also have unfortunate personal attacks on several of your fellow co-workers. I’m the CEO and can/should take a few arrows; it’s part of the job. Your fellow colleagues do not deserve the same treatment. I have not yet wanted to respond, because we have yet to complete an operational review and when I communicate with you all, I want to be able to provide meaningful facts and next steps, not fluff, both with regards to our operations and how we can listen better. I expect to be able to do that within the next week or two, including what our plans for 2013 look like.

So why am I writing now? Well, last night a coward in our midst decided to take the discussion down a bigoted path of hate speech. Not only is this something we all, as LivingSocialites should have zero tolerance for, it also overshadows and devalues some of the constructive criticism and commentary established previously in the comments. The destructive, bigoted speech against your fellow co-workers needs to stop. Free speech is embraced; hate speech is not.

Moving forward, I look forward to providing a full operational update to the company in the coming weeks. Until then, for those in the US, have a great Thanksgiving Holiday.

~ Tim

Photo by Darrow Montgomery