Two online travel giants have joined a plethora of other companies in reducing their workforce to survive the COVID-19 pandemic.
Kayak and OpenTable have laid off, furloughed or handed out reduced hours to at least 400 of their employees.
The companies, owned by Booking Holdings, had flagged a tremendous drop in revenue from the COVID-19 pandemic. According to Skift, it marks the first reported job cuts at Booking Holdings linked to the coronavirus.
In a letter to employees, obtained by Skift, Kayak and OpenTable chief executive Steve Hafner said: “We did everything we could to avoid these steps, but our revenue has dropped tremendously from the COVID-19 crisis.
“And despite our hopes for a quick recovery, most experts now predict a prolonged downturn.
“It’s time to adjust the team accordingly – like so many others in the travel and dining industry.”
Of those impacted, 160 will be laid off, while 240 are subject to furloughs or reduced work hours.
It comes after the company considered several other approaches to cost-cutting, but ultimately decided to trim office and personnel expenses by 20 per cent, Hafner told employees.
He said his direct reports are taking 15 per cent salary reductions for the rest of the year, and he already waived his own.
“These were not easy decisions and we’ll do our best to help you,” Hafner told employees.
“The future will get brighter. Our mission of helping everyone easily experience the world is more important than ever.
“Travel and dining will be reimagined and our services will be too. We’ll emerge stronger and better.
“But all of that provides little solace for days like this one.”
Meanwhile, Trivago has begun the process of making “changes to its organisational setup” in response to the COVID-19 pandemic that will include an unspecified number of job cuts, described as “significant”.
This comes as the company faced a drop of 95 per cent in referral revenue (the clicks Trivago charges advertisers when it sends them leads for hotel or vacation rental bookings) in the last week of March.
By comparison, 2019 saw Trivago generate at least 74 per cent of its revenue from advertising with the likes of Booking Holdings and parent company Expedia Group.
In a letter to shareholders, Trivago advised it had significantly reduced its advertising spend “to an absolute minimum” due to the impacts of the coronavirus.
The Düsseldorf-based company is currently accessing the German government’s short-term work scheme, known as the ‘Kurzabeit’ plan, to subsidise a portion of its payroll.
However, Trivago advised it is targeting “a substantial reduction in our cost base”, including a significant headcount reduction.
It comes as Trivago joined eight other German travel start-ups in pleading with Google to provide relief from a portion of their first quarter 2020 advertising bills.
In a statement addressing the potential of providing relief, a Google spokesperson told Skift: “Our travel partners are facing unprecedented challenges and we’re working with partners to help protect their businesses, including helping them surface their cancellation policies in our travel search products and expanding our ‘pay per stay’ pilot earlier this month to all hotel ads partners globally to shift the cancellation risk from our partners to us.”
Featured image: iStock/Philiphotographer
