US / Netherlands: Four months after Booking.com chief executive Glenn Fogel admitted company job cuts were “probable”, the online travel agency has announced an extensive round of layoffs, with 25 per cent [roughly 4000 employees] believed to be affected.
The layoffs are symptomatic of the Covid-19 pandemic’s impact on the global travel industry, including accommodation booking platforms and airlines whose operations have ground to a near halt during this crisis.
In a regulatory filing published yesterday, Booking.com said it was still working to “develop more clarity on the timing, the number of affected employees, financial impact and other aspects of the contemplated cost reduction actions”, but admitted it “expects to finalise its plans and make relevant announcements to employees, on a country-by-country basis” from the start of September.
The Amsterdam-headquartered OTA, which specialises in facilitating lodging reservations in accommodations such as individual homes, apartments and hotels, is yet to make any specific announcements on the total number of employees who are being let go, nor how much it is planning to save as part of the latest cost-cutting measures.
In a statement, it said: “While we have done much to save as many jobs as possible, we believe we must restructure our organisation to match our expectation of the future of travel. So unfortunately, as a result of the crisis, we, like so many other travel companies, need to take the extremely difficult step to reduce our global workforce.”
Booking.com has more than 29 million listings and is present in 225 countries and territories worldwide, and its parent company, Booking Holdings is reportedly expected to release its second quarter financial results on Thursday [6 August].
The company is following the same path of competitors such as Airbnb, Expedia and TripAdvisor in announcing sweeping job cuts as it seeks to navigate the post-pandemic travel space.
Online travel company TripAdvisor was one of the first major travel players to bite the bullet in April, when it laid off 900 employees — accounting for almost 25 per cent of its global workforce. The “significant” cost-cutting exercise was announced by CEO and co-founder, Stephen Kaufer, in a company blog post.
Airbnb followed suit in May, when it trimmed its global workforce by 25 per cent, affecting some 1900 employees and sending reverberations around the travel sector. It also slashed its investment in hotels and its luxury business ventures in a move to help the travel behemoth survive the coronavirus crisis.
Most recently, Expedia announced an 82 per cent drop in revenue for the second quarter of 2020, as total gross bookings for the three-month period up to 30 June also saw a 90 per cent decline on the equivalent period in 2019, to $2.71 billion. The Seattle-based OTA cut 3,000 jobs even before the pandemic in February, and it appointed Peter Kern as its new CEO at the end of April to guide it through the crisis.
Meanwhile, fellow Booking Holdings brands, KAYAK and OpenTable revealed that 400 employees were being laid off, furloughed or having their work hours reduced as a result of the pandemic. The CEO of both brands, Steve Hafner, attributed the cuts to the drops in revenue caused by the Covid-19 pandemic, and told staff they had done “everything” they could to avoid such steps.
Booking Holdings’ struggles date back to the start of this year, when its gross travel bookings between January and March 2020 saw a 51 per cent decline from the same period a year ago [a drop from $25.4 billion to $12.4 billion]. Room nights also nosedived by 43 per cent year-on-year in this year’s first quarter.
Booking.com’s layoffs are likely to supersede those seen across its competitors, despite a $4 billion loan injection with help from the Dutch government, made up of “four tranches of senior notes due between 2025 and 2030” to alleviate immediate fears over the company’s future.
The job cuts appear to align with initial estimations by the World Travel and Tourism Council, which predicted that Covid-19 could lead to up to 75 million job losses in the travel sector worldwide, in light of lockdowns and restrictions on mobility and air travel.