With a goal to drive efficiency forward this year, Expedia layoffs are moving ahead with a target of 9 percent job cuts in the upcoming weeks. Reports indicate that the company will soon lay off up to 1,500 employees of their current active workforce. News of the restructuring efforts followed the fourth quarter and full-year 2023 Expedia earnings call where the company actually presented pretty strong performance numbers. The company has since sent out a memo to employees regarding the Expedia job cuts but affected employees should start hearing about their termination by the end of next week. The travel platform had been hit hard during the COVID-19 pandemic as the travel bans cut sharply into their business earnings, but the company made a clean comeback soon after, with their annual revenue for 2023 growing to $12.8 billion USD, marking a 10 percent year-over-year growth. Their full-year GAAP (Generally Accepted Accounting Principles) saw a 127 percent growth compared to 2022, one of their highest growth numbers to date.
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Expedia Layoffs Reported Despite Good Revenue Numbers: Company to Refocus Resources In the Right Areas
The latest Expedia job cuts are slated to target the Product and Technology division at the company, where they hope to eliminate some redundant roles and re-invest in core strategic areas. The news of the job cuts may come as a surprise to many who had hoped that the Expedia layoffs in 2023 had sufficiently eliminated unwanted roles so the remaining employees could find some security in their jobs. During the 2023 Expedia job cuts, an unspecified number of employees lost their jobs in the very same Product and Technology division, which makes it appear as though the company has a very specific goal for the company’s future in mind that isn’t being met yet. Some estimates like that by Skift put the Expedia layoffs 2023 numbers at around 100 employees, so the job slashes are set to be significantly larger this time around. This was the second round of layoffs in October after an initial round earlier in the year.
The Expedia Group is made up of three “pillars,” the Expedia consumer brands, the Expedia Product and Technology unit for all the strategy and planning, and Expedia for Business which focuses on B2B services the company has to offer. The company’s flagship consumer brands include Expedia, Hotels.com, and Expedia Vrbo, which are united by a One Key loyalty plan for an enhanced travel experience. “Moving forward, we are now able to execute without the numerous constraints we have faced in recent years. We will continue to focus on acquiring and retaining the right customers, driving share growth in our B2C and B2B businesses, and providing the best product and partner experience in the industry. It is really exciting to be in position to go back on offense and lead the industry,” said Vice Chairman and CEO Peter Kim after the successful Expedia earnings call. While the B2C and B2B appear to be the target area for growth, it is the Product and Technology division that’s seeing the biggest shakeup in order to facilitate the change.
Another aspect of the changes at Expedia Group appears to be the news that Peter Kim will soon be stepping down from his role as CEO by May 13, 2024. The company has stated the change is mainly due to the completion of the initial contract signed between Peter Kim and Expedia, and now that it has come to its natural end, he will continue on as the company’s Vice Chairman and member of the Board. Ariane Gorin, current President of Expedia for Business, will take over as CEO following the transition. This news was revealed before the earnings call and reports of Expedia layoffs broke so there is no indication that these stories are connected, however, they do point towards major changes within the company.
Expedia Cash Expenditures and Pre-tax Charges
News of the Expedia layoffs communicated on February 26, 2024, was also followed by a regulatory filing with the Security and Exchange Commission, where the company stated it was “committed to restructuring actions to recalibrate resources in light of the Company’s organizational and technological transformation.” The Expedia cash expenditures and total pre-tax charges are expected to range between $80 million USD to $100 million USD. The majority of these investments are attributed to employee severance and compensation benefits that they will offer to those impacted by the Expedia layoffs.
The memo regarding the Expedia job cuts was obtained by GeekWire, and it highlights the company’s growth-centric focus as a reason behind the layoffs. While it doesn’t elaborate on the exact form of compensation and severance packages that will be made available to existing employees, it does reassure them that there will be some support provided. “We will be doing everything we can to support you, including providing severance packages, extended access to the Employee Assistance Program, and providing support for those who want to apply for another role internally.” the memo by CEO Peter Kim states. It also encourages employees to seek out the well-being resources available at the company if they need support during these difficult times.
After the Expedia layoffs in 2023, this current round of job cuts should leave the Product and Technology team significantly smaller than before. An optimistic outlook could see the company start hiring again for the new roles they finalize as necessary for the team, but this may not be on the cards anytime soon. It will likely be a while before rehiring efforts begin at the company, so the employees affected by the Expedia layoffs will soon have to begin looking for alternate opportunities in an already passive job market. We’re still hoping we see the layoff trend start to taper off for 2024, but it seems unlikely to slow down just yet.
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