Booking.com plans to lay off up to 25% of its global workforce amid the coronavirus pandemic, which has been taking a toll on travel.
Booking Holdings, Booking.com’s parent company, will complete its plans and make announcements to its workforce on a country-by-country basis beginning in September, according to the company filing.
Booking Holdings is also the parent company of other online travel firms like Priceline and Kayak, but only Booking.com will lay off people, according to the filing. A company spokeswoman said that Booking.com has more than 17,000 employees.
Booking saw a 51% decline in first-quarter gross travel bookings year over year. Booking will disclose its second quarter 2020 earnings Thursday.
Shares of Booking Holdings dropped by less than a percent in premarket trading. The company’s shares have declined by 19.65% percent year to date.
“The Covid-19 crisis has devastated the travel industry, and we continue to feel the impact as travel volumes remain significantly reduced,” a company spokeswoman told CNBC in a statement. “While we have done much to save as many jobs as possible, we believe we must restructure our organization to match our expectation of the future of travel.”
Decline in travel demand
Aside from booking sites like Booking.com, airlines and plane manufacturers also experienced the financial damage being pressed on by the pandemic.
UK flag carrier British Airways has announced that it will be retiring all of its Boeing 747 aircraft amidst the dramatic decline in travel due to the health crisis.
British Airways said it will retire its entire Boeing 747 fleet due to the sharp decline in air travel amidst the coronavirus pandemic. The British airline is the world’s largest operator of the 747 jumbo jets, having 31 aircraft in its fleet.
American Airlines announced that it will furlough about 25,000 front-line employees this fall as surges in coronavirus cases continue to paralyze travel demand.
According to American Airlines, the furlough notices for their employees, who make up 29% of its US mainline workforce, will be sent soon as the company aims to slash the workforce by October.
The airline asked its employees to apply for new extended leaves that can last up to two years or early retirement packages. This way, they will get more people off payroll as possible before being forced to involuntarily strike out their jobs.
The revenue of American Airlines in June was declined by over 80% than a year ago, CEO Doug Parker and President Robert Isom said in a note to staff.
“And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again,” they wrote.
The airline industry may lose $84 billion in 2020, according to the International Air Transport Association (IATA). Air travel dropped by 98% in April from last year.
The agency previously predicted 8.2 billion air travelers in 2037. However, the efforts made to curb the spread of the coronavirus badly hit air travel.
“We think airlines are going to probably lose an unprecedented $84 billion in 2020,” Brian Pearce, chief economist for IATA, told CNBC.
“We’re really only just starting to see countries negotiating bilateral openings of markets. For example, the Trans-Tasma bubble between Australia and New Zealand, China and Singapore, as well as China and Korea.”
