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Sabre layed off several hundred Travelocity employees last year, but the pain at Sabre is not over as the company intends to eliminate 350 positions in 2014. The spin is that the cuts will better enable the company to focus on product development. Yes, less is obviously more.
While Sabre began restructuring its Travelocity business in North America and Europe last year, the corporate reorganization continues as Sabre revealed it plans to reorganize its technology organization in 2014, eliminating 350 positions.
Part of the technology organization makeover may continue into 2015 as Sabre stated it intends on completing the majority of the changes this year.
Sabre employed 10,000 people as of the end of 2013, and its technology organization consisted of 4,000 employees and contractors.
The company has detailed its reorganization plans in recent financial filings, including a quarterly report filed May 15. In addition to what’s left of Travelocity, Sabre operates a global distribution system for travel agents and suppliers, an airline IT business, and hospitality solutions.
The reorganization of Sabre’s technology group began in the fourth quarter of 2013, and is geared to “better align costs with our current business, reduce our spend on third-party resources, and increase focus on product development,” the company states.
Although not specifically mentioned, the restructuring is also designed to trim costs and spur profitability. Sabre reported a $2.84 million net loss in the first quarter.
In tandem with Sabre’s agreement to outsource Travelocity North America’s technology, supplier relationships and customer service to Expedia Inc., Sabre also began in the fourth quarter of 2013 to restructure Travelocity Europe, including lastminute.com.
Sabre stated it streamlined Travelocity Europe’s operations to make it more efficient and to set it up as a standalone operation.
As part of all the restructuring moves, Sabre expects to incur $11 million in additional charges in 2014 related to contract terminations and employee benefits.
Sabre initially estimated that its restructuring liabilities would be $3 million higher than its current estimate, but the company reduced the estimate to $11 million when it avoided having to pay some employee termination benefits as an unspecified number of Travelocity employees transferred to Orbitz Worldwide when it acquired the Travelocity Partner Network from Sabre.