As positive cases of the coronavirus climb close to 5 million with over 319,000 deaths worldwide, it’s clear that the recovery process might take several years.
Despite some countries loosening movement restrictions, we’re starting to see signs of societal and economical challenges up ahead.
Agoda appears to have become the latest to suffer the brunt of the global pandemic.
1,500 Agoda employees laid off.
The Asian online travel giant recently announced that it’s downsizing the company after previous attempts in reducing costs weren’t as effective as expected.
CEO John Brown revealed this was a last resort. Brown himself voluntarily forgo his salary for the rest of 2020 prior to arriving to this decision.
“Before getting to this decision we took aggressive measures and every opportunity to reduce costs across the business. Staff reductions will always be the last resort, but we have had to make this very difficult decision. The truth is that while we are seeing some signs of recovery in our core markets in Asia-Pacific, the impact of COVID-19 on the travel industry is deeper and will be more prolonged than we could have envisaged.
“Today, we announce the need to make even greater savings in order to ensure that Agoda can weather this crisis and prepare for the long term. We need to resize and reshape teams to adapt to what travel will look like in the future, and this means that we have taken the very difficult decision to reduce our existing team by 1,500 employees,” Brown said in an email to employees, according to Yahoo! Finance.
Brown had also announced this decision to his employees in a virtual town hall on May 18. The 1,500 people retrenched across 30 nations accounts to 25 percent of Agoda’s workforce.
“Naturally, functions where teams workload is volume-driven are most impacted. Most of the cuts are in our CEG (Customer Experience Group) but they are also in product, IT, finance, partner services, marketing and Rocketmiles (which reports to Agoda),” Brown said, adding that this will be the first and last cut.
Senior leadership members will have their salaries cut by 20 percent starting June 1.
What now for Agoda?
Agoda now joins Kayak and OpenTable in laying off and furloughing their employees as drop in revenue significantly impacts the cost to operate.
The two companies had laid off some 400 people altogether.
Naturally, there needs to be an alternative way to figure out methods to not only survive the troubled waters but come out stronger.
Brown said to Skift that the company’s focus will now be on innovating products that’ll provide flexibility.
“Expectations are that growth will come from domestic travel first and we will reshape teams to help partners capture this demand,” he said.
The company had unveiled EasyCancel in March to allow hotels and properties around the globe to offer flexible booking experience with an option to cancel within 24 hours prior to arrival.
To date, Agoda serves 200 countries, offering 2.6 million properties.