Expedia
announced plans to cut around 1,500 jobs in a bid to “recalibrate resources” as the travel industry faces up to slower growth in 2024.
The online travel agent has undergone a major transformation in recent years, moving its various brands onto one platform and integrating artificial intelligence tools.
That means there’s scope for making the company more efficient to save costs at a time when demand looks set to normalize. Expedia also benefited from layoffs in the technology sector, as it hired more highly-skilled tech workers amid its transformation. Now, like the tech sector, Expedia is doing its own layoffs.
Tough comparisons to 2023, and geopolitical factors such as the tensions in the Middle East, means that the year ahead looks tougher for the industry, particularly after strong share-price gains over the past twelve months.
After a stellar 2023, it’s been a challenging start to the year for
Expedia,
which announced the surprise departure of CEO Peter Kern earlier this month. The online travel agent then disappointed investors with its outlook for the year ahead on its fourth-quarter earnings call, warning that growth rates will decelerate across the world.
The layoffs equate to about 9% of Expedia’s total workforce and the company said the restructuring would allow it to recalibrate resources in light of its organizational and technological transformation. The total pre-tax charges and costs associated with the restructuring are expected to be between $80 million and $100 million, the company said late Monday.
Last year’s roaring success has posed problems for the travel sector as investors digest the prospect of tough comparisons and slowing demand growth in 2024.
Expedia stock has fallen 11% so far this year through Monday’s close but remains 26% up over the past twelve months. Shares in its rival
Booking
are down 1.3% in 2024 but 38% higher over the past year.
Booking also flagged moderating demand and growth in 2024 when it reported earnings last week.
Airbnb
signaled a slowdown in the growth rate of nights booked on its platform in the first quarter.
Melius Research analyst Conor Cunningham said it’s been a “difficult” earnings season for the online travel agency (OTA) sector, in a note Sunday.
“Some of the deceleration has to do with the timing of Easter, but a chunk has to do with the moderation of the core business. Ultimately, the travel outlook should be quite supportive, but OTAs need growth to reaccelerate again to drive confidence in the models,” he said.
Expedia stock pointed 0.7% higher ahead of the open, Booking was flat and
Airbnb
rose 0.3%.
Write to Callum Keown at [email protected]
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