It's clear that Vacasa's ranks were bloated, and that the company was not very well-run in recent years. Like several other now-struggling, newly public companies, Vacasa faces a challenging road ahead.
Vacation rental property manager Vacasa is eliminating 1,300 positions, which was 17 percent of its workforce, as the company determined it had to make deeper improvements to operations. The firings took place Tuesday, just three months after the company axed 280 staffers.
Skift got a tip Monday night that Vacasa layoffs would take place Tuesday, and the company provided details in a financial filing after the market closed.
In an email to employees Tuesday, Rob Greyber, who became Vacasa CEO in September, said the company soon thereafter changed various aspects of its operations, but realized more recently during the annual planning process “that Vacasa has more work to do.” [See the full text of Greyber’s email to employees embedded below.]
“As part of this, we need to reduce our costs and continue to focus on becoming a profitable company,” Greyber wrote in disclosing “the reduction of approximately 1,300 roles, or about 17 percent of our total workforce.”
There was no mention in Greyber’s announcement that these deep job cuts were tied to the state of the economy. Instead, it seems, these layoffs are geared to root out inefficiencies, to reduce Vacasa’s cost structure, and to optimize execution and performance.
Greyber wrote that he’s optimistic about the company’s future, adding, “I am equally focused on improving and accelerating our pace of execution across the company.”
Reorganization of Sales Staff
One person laid off today said the firings seem to inordinately impact the company’s commercial department, which is being consolidated into a single unit instead of the previous inside sales and outside sales structure. Vacasa is newly assigning territories to sales staff, the former staffer said.
Operations employees, such as cleaners, caretakers and maintenance workers, who are in high demand, are less impacted by the job cuts than the commercial staff, the former employee said.
Vacasa stated that the layoffs impacted both local operations teams, as well as “central teams.”
The former employee described Vacasa’s now-previous staffing as “bloated.”
“Vacasa’s got a lot of growing up to do,” said the former employee.
If Vacasa can’t increase its cash flow in 2023, it’s going to need more outside investment or to make further cuts to get profitable, the ex-employee said.
Priorities include adding vacation rentals for Vacasa to manage, expanding the company’s market position, and improving the Vacasa’s software and operating platform, Greyber wrote in the email to employees.
There have been a flurry of layoffs in tech and travel over the last few months. Alphabet/Google recently parted with 6 percent of its workforce, or 12,000 employees, and Microsoft axed less than 5 percent of staff, or 10,000 workers.
Most recently luxury subscription service Inspirato eliminated 12 percent of its positions. Among property managers, Sonder laid off 21 percent of its corporate staff and 7 percent of frontline staff in a restructuring in June designed to get it headed toward profitability in 2023, and AvantStay trimmed 22 percent of its staff in November.
In a statement to Skift separate from Greyber’s email to employees, Vacasa said: “These reductions were strategically made across the company to maintain or exceed our high service levels for Vacasa homeowners and guests.”
Since arriving at Vacasa, Greyber, who was president of travel management company Egencia until April 2020 when it was under Expedia Group ownership, has tried to tweak Vacasa’s strategy. He said in November the company would downplay its longstanding practice of making acquisitions of regional or smaller vacation rental property managers in favor of organic growth, with the goal of making its sales team more productive.
Greyber at that time also appointed a new chief commercial officer, and Greyber assumed the role of chief product officer, in addition to his CEO duties, on an interim basis.
Greyber said in November that Vacasa would also tackle longstanding customer support issues at the local level.
Vacasa said it will be providing severance to employees impacted by the layoffs, as well as healthcare benefits to those currently enrolled, and job placement services.
Vacasa, which became a public company in December 2021, still vows to become profitable in 2023 on an adjusted earnings before interest, taxes, depreciation and amortization basis.
As with several other travel companies that went public through mergers with special purpose acquisition companies, Vacasa’s valuation and share price has plummeted on the stock exchange.
In a filing with the U.S. Securities and Exchange Commission Tuesday after market close in New York, Vacasa stated that the costs associated with the layoffs would be around $5 million, including some $4 million for severance pay and benefits, and $1 million for related costs. The costs would be incurred in both the first and second quarters, and the workforce reductions would be complete by the second quarter.
Vacasa’s share price closed at $1.67 on Tuesday.
Photo credit: A property that Vacasa managed. The company laid off 17 percent of staff on January 24, 2023.