Expedia Group Inc. is cutting approximately 9% of its employees as the online travel company aims to boost growth and reclaim its market share after a recent change in leadership.
While full details have not yet been disclosed, Chief Financial Officer Julie Whalen discussed the possibility of a cost-optimization structure that would improve margins during the company's earnings call earlier this month for the fourth quarter and full year 2023.
A "Re-Platforming" Initiative of Expedia with a Cost-Optimization Structure
Whalen mentioned that the company expects savings after completing a significant part of its "re-platforming," aiming to improve operating efficiencies and reduce costs in customer support and other operations. They also anticipate savings in overhead expenses as they phase out systems and reallocate resources now that most of their re-platforming work is finished.
The remarks coincided with the announcement that CEO Peter Kern would step down in mid-May, and Ariane Gorin, president of Expedia for Business, would assume the role.
Expedia Slashing 1,500 Jobs to Prioritize High-Growth Areas
The Seattle-based company will trim around 1,500 positions worldwide to focus on essential areas for growth, reassessing resource allocation following recent achievements in its transformation journey to prioritize key tasks, as stated by a company spokesperson via email. Consultations with local employee representatives, where relevant, will happen before any final decisions are made.
As stated in a regulatory filing, affected employees received notifications about the job cuts on February 26. According to its most recent annual report, the company had 17,100 employees across over 50 countries by the end of 2023, with half of them in technology positions.
Online Travel Industry's Sluggish Sales Figures Post-Pandemic
Earlier this month, Expedia shared disappointing holiday sales figures and a less optimistic forecast for the current quarter. They also revealed that Ariane Gorin, the head of the rapidly expanding enterprise division, will take over as CEO on May 13, replacing Peter Kern, who has been in the role since 2020.
READ ALSO : Expedia's Surprise Leadership Change, Names Ariane Gorin as Next CEO to Drive B2B Success
The company, along with online travel competitors like Airbnb Inc. and Booking Holdings, is facing a slowdown in travel growth as the surge in demand following the post-pandemic period last year seems to be fading.
Expedia Shifting Focus on Growth Revenue
Expedia is shifting its focus to increasing sales this year after dedicating the past two years to technical upgrades and an awaited overhaul of its loyalty program. Although its consumer business has experienced slower revenue growth, the enterprise division, which provides advertising and travel technology to corporate clients and manages booking platforms for major brands like Walmart Inc. and American Express Co., has been driving double-digit gains for the company.
Expedia and Travel Companies Looking Ahead
Expedia anticipates total pre-tax charges and cash expenditures for the restructuring to range between eighty million dollars and one hundred million dollars.
Travel companies are lowering their expectations for the year, indicating that demand is anticipated to increase slower this year.
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