Booking.com, recently shared its plan to cut down 25% of its global workforce due to the pandemic-induced economic downturn.
News of layoffs has been making headlines from sectors such as retail, banks & financial services, and technology. With the travel being reduced to negligible levels, one sub segment of the sector that began to cut jobs was manufacturing. Airbus, Boeing and United Airlines are just a few that made the announcements a few weeks ago. The next to be hit were travel sub segment of hospitality which operates on a different model from the large hotels. This was signaled by the layoffs by AirBnBOpens a new window and then by OyoOpens a new window , which announced that it is likely to remove as many as 90% of its US workforce. Even airports have shared how they are cutting down on their staff due to the massive drop in traffic.
The latest blow to the sector comes is received from Booking.comOpens a new window , that recently shared its plan to cut down 25% of its global workforce due to the pandemic-induced economic downturn. It currently has 17,000 employees. Booking Holdings which is the parent company will finalize its plans and make announcements to employees on a country-by-country basis starting in September.
It is the largest online travel agent (OTA) but through the substantial layoffs there is a clear indication that cost optimization is the need of the hour. Online operators like Expedia Group and TripAdvisor have also already made significant cuts to their workforce.
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If not layoffs, what are the alternatives that the companies in this sector have?
- Retraining and Re-skilling – This is the most probable route that can prevent or reduce layoffs, as well as allow the companies to have talent that is skilled enough to meet the new demands in a post COVID-19 world. For example, in some companies, Opens a new window employees who were responsible for ticketingOpens a new window were made to undergo digital marketing courses so that they can transition into new roles and remain employed. Similarly, the ‘Airline Industry Retraining’ (AIR) Scholarship ProgramOpens a new window has been created by the Australia’s Institute of Data so that workers from the two sectors that have been impacted due to the pandemic with the purpose of moving them into data and cybersecurity roles. With the need for cybersecurity rising every year and the massive gap in talent that is already present for this area, this could prove to be a step in the right direction.
- Redeployment of talent in other diversified businesses – Companies can identify new areas for diversification and remain sustainable in the long run. When they diversify, organizations can redeploy the talent that is no longer required in a business that is declining, into new business areas. For example, Yatra Online, Inc.Opens a new window , a leading online corporate travel platform that has a huge segment of corporate and SME clients, has announced its partnership with upGrad Enterprise. Uprad is one of the largest online higher education company, partnering with which opened up new avenues for Yatra to expand into. Under the partnership, Yatra has extended its portfolio beyond travel and through it Yatra will provide its corporate clients opportunities for learning and skill development for their employees.
- Reduced pay and work hours – In the sub segment of hotels and hospitality, some are proactively cutting costs by reducing the salaries of senior executives and shortening work weeks. This is aimed at reducing the layoffs. Hourly wage workers might have to work fewer hours and many full-time employees can move to the part-time role. This will also provide them with ample time to manage the extra burden of home based responsibilities while being assured of jobs.
It remains to be seen whether these layoffs might be a short-term response to the now diminished demand. There are some travel agencies that are predicting a surge in demand once the pandemic starts to subside. Also, with more and more individual travel operators possibly opting to be on aggregated virtual platforms, there may very well be an opportunity for aggregators such as Booking.com to explore, that can provide a boost to the depleting revenue stream.
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