Expedia is planning to lay off 12% of its global workforce, citing its disappointing 2019 business performance and an “unhealthy and undisciplined” growth strategy.
The announcement of the layoffs on Monday came less than three months after a management shakeup at the online travel giant in which Chairman Barry Diller took control of day-to-day operations and CEO Mark Okerstrom and CFO Alan Pickerill stepped down. (Eric Hart, the company’s chief strategy officer, is serving as acting finance chief.)
“A major reason for our management change was the deep belief from Barry, [Vice Chairman Peter Kern] and the board that while travel remains rich with opportunity, our company needed a fresh and forward look at clarifying our strategy and simplifying our operations,” the company said in an email to staff.
“After consulting with leaders around the globe, we recognize that we have been pursuing growth in an unhealthy and undisciplined way,” it added.
The company said it was “committed to fundamental changes in our approach” and intended to “reduce and eliminate certain projects, activities, teams, and roles to streamline and focus our organization.”
An Expedia spokesperson told Skift that 12% of the “direct workforce” would be laid off, with some 500 jobs at the Seattle headquarters expected to be eliminated. Expedia had a total of 25,400 employees, including part-timers, at the end of 2019.
“Diller and Kern are following through on their pledge made earlier this month to lop off up to $500 million from the company’s annual operating costs in 2020,” Skift said, referring to Expedia’s fourth-quarter earnings call.
For the quarter, revenue grew 8% to $2.63 billion while adjusted earnings per share fell 1% to $1.24. During the earnings call, Diller described Expedia as a “bloated organization,” saying it had added “people and complexity and all this stuff until, frankly, very few people could figure out what the hell they were supposed to do during the day.”
Expedia’s share price jumped after the executive shakeup and the Feb. 13 earnings call but in trading Tuesday, they fell 4% to $107.84. The company said it would incur $135 million to $185 million in pre-tax charges in 2020 for employee severance and benefits costs.
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