At first, John Brown cut costs rather than staff, including foregoing his salary for the rest of 2020. But the Agoda CEO now has to take the last measure, citing a deeper and more prolonged recovery than expected.
Asian online travel giant Agoda is laying off 1,500 workers, a downsizing that CEO John Brown promises is the first and final cut he will be making as a result of the coronavirus crisis.
The Booking Holdings-owned Asian travel brand has held off staff cuts for as long as it could, first reducing costs across the business. This includes Brown foregoing his salary for the rest of the year. But the impact of Covid-19 proved deeper and more prolonged than expected, Brown told Agoda employees in a virtual town hall on Monday afternoon in Asia.
The retrenchment represents about 25 percent of Agoda’s total 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, when asked which areas were hit most by layoffs.
In addition to these cuts, all senior leadership team members will take a temporary salary reduction of 20 percent from June 1. Brown previously announced he would not take a salary for the remainder of 2020.
Agoda isn’t the first Booking Holdings’ brand to axe staff. Last month, Kayak and OpenTable laid off, furloughed or handed out reduced hours to 400 employees, citing a tremendous drop in revenue from the coronavirus pandemic.
A cut of 1,500 staff in 30 countries is deep but Brown said this would be “the only one,” helping to prevent anxiety and uncertainty among the remaining team going forward.
In an email to employees following the virtual Town Hall, Brown said, “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 longterm. 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.”
He told Skift his focus henceforth will be on innovating products that will provide flexibility. “Expectations are that growth will come from domestic travel first and we will reshape teams to help partners capture this demand,” Brown said.
In March, Agoda introduced EasyCancel, allowing participating partner hotels and properties worldwide to offer guests greater booking flexibility and the option to cancel up to 24 hours before arrival. This relates to all bookings made until June 30.
The new product was in response to customers’ desire for broader flexible booking solutions.
Agoda offers 2.6 million properties in 200 countries and territories worldwide. Last year, it added a flight product and packages to help make travel even easier.
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Photo credit: Agoda's logo. Photo credit: Agoda