Skift Take

Video conferencing looks like it will take a bigger chunk than expected out of revenue next year, with a fifth of employees bearing the brunt.

Another major travel management company has succumbed to pandemic pressures  that include virtual Zoom meetings. BCD Travel is announcing a series of job cuts that will bring the number of its layoffs to 3,000, out of a workforce of 14,900.

The 20 percent reduction is since the pandemic began, and the agency’s downsizing follows American Express Global Business Travel’s own staff consultations, which started in the UK last month.

“Unfortunately, addressing the current downturn in transactions requires the difficult decision to let talented and highly valued people go. Like so many other companies in the travel industry, BCD will be a smaller organization coming out of the pandemic. We expect that more than 3,000 staff members will be affected,” a spokesperson told Skift.

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According to Dutch newspaper Financieele Dagblad, BCD Travel founder John Fentener van Vlissingen said he expected the agency would not return to profitability until 2022, DutchNews reported.

According to the report, BCD books 70 percent of its turnover in the U.S., where the domestic market is expected to recover a lot sooner than the international market. BCD Travel recorded sales of $27.5 billion in 2019. Last month, Australia’s Corporate Travel Management bought Omaha-based Travel and Transport to capitalize on the strength of the region.

“More people will work at home and there will be more video conferencing,” Van Vlissingen was quoted as saying. “A survey of our clients — and that list includes 25 percent of the Fortune 500 — showed that there are companies which will travel less, and companies which will travel more, such as pharmaceuticals firms.”

According to The New York Times, the chairman of Tata Sons claimed his firm’s consultancy closed $2 billion of deals during the course of “five or six Zoom calls.”

Yet Another Restructure

BCD Travel is following in the footsteps of CWT, consolidating its geographical footprint.

On September 22, it merged its European and UK and Ireland businesses to form a single European region, led by Mike Walley as president, Europe. Walley replaced Stewart Harvey, who previously ran the show for Europe, the Middle East, and Africa. Walley will continue to oversee BCD’s global media and entertainment division.

The company also consolidated its global network teams under Greg O’Neil as executive leader. As president, Asia Pacific, Middle East, Africa and global network, O’Neil will continue to oversee Asia Pacific in addition to his new responsibilities. Both Walley and O’Neil report directly to BCD CEO John Snyder.

Creating a top heavy organization can be risky, one industry observer told Skift when commenting on CWT’s own global restructure. “You need strength at the local level,” he said, for companies to emerge successfully from a downturn such as this.

“All of our regional and central leaders are outlining necessary steps for their areas. We know this downturn won’t last forever, so we’re balancing our response to the transaction drop with ongoing prudent investment in the projects and technologies that will continue to drive innovation in our clients’ programs, increase revenue and improve efficiency within our own organization,” the BCD Travel spokesperson told Skift that

With domestic travel the next key battleground, how will BCD Travel set out its path to recovery exactly?

“Our plan is based on our fundamental financial stability, our strong partnership with clients, our success in winning new business and the advantages of a broad portfolio that includes virtual meetings. BCD came into the pandemic strong and has the liquidity it needs to weather the Covid-19 downturn,” said the spokesperson.

“BCD Travel has annually reinvested 35 percent to 40 percent of its earnings back into the company over the last five years in support of people, technology, and infrastructure. Despite the sharp drop in earnings, we will continue to invest a significant amount into the company, especially in innovative solutions so our clients can get back to business and ensure duty of care, while their travelers stay safe and productive,” they added.

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Tags: american express global business travel, bcd travel, coronavirus, corporate travel management, cwt

Photo credit: BCD Travel's Kanas City office. Competition in the U.S. market will be fierce next year if international travel remains paused. John Kohlman / BCD Travel

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