You can see Tripadvisor's priorities crystal clear in where its restructuring occurred. The Tripadvisor Core segment took the heaviest hit, and Viator was impacted the least.
Tripadvisor laid off around 125 employees, or 4% of its workforce, in the third quarter and the company said last week that additional job trims will take place before the end of the year.
In certain European countries, for example, companies must carry out a process with unions or works councils before they can fire employees. So some employees targeted in the job cut process in the second or third quarter won’t actually leave Tripadvisor until the fourth quarter.
“As of September 30, 2023, the Company had nearly 3,000 employees, which includes employees that are currently the subject of local law and country-specific consultation processes, a decrease of approximately 4% when compared to the second quarter of 2023,” Tripadvisor stated in a financial filing last week.
Tripadvisor stated that the 3,000 employee number “will decline further in the fourth quarter of 2023, as impacted employees leave the Company.”
In response to this article, a Tripadvisor statement read:
“Any workforce reductions related to our recent filing and the earnings commentary over the last two calls have already been communicated to impacted employees and we have not communicated that any additional cuts are on the way. Our recent Q3 10Q headcount disclosure reflects what we previously shared with our workforce back in August — that we had taken the decision to restructure and reorganize aspects of our business this year.
“The headcount reduction reflected in the filing primarily impacted roles across Tripadvisor’s Core and corporate G&A functions, as communicated in August on our earnings call. As we noted on that call, this is about creating flexibility across our strategic priorities and was certainly not meta-specific as portrayed in this article. Meta remains an important component of our business model going forward.”
Tripadvisor Core Took the Brunt of the Layoffs
The Tripadvisor Core reporting segment, which includes hotel metasearch, Tripadvisor-branded experiences, vacation rentals, restaurants, and cruises, was most heavily impacted by the layoffs.
It’s still the largest part of the business, but it won’t be for long.
In the third quarter, the Tripadvisor Core segment saw its revenue grow just 2%, to $290 million.
In contrast, Tripadvisor’s Viator experiences segment had revenue growth of 41%, to $245 million.
The importance of Tripadvisor metasearch has been waning in relation to Tripadvisor and Viator’s experiences as Google Hotels took market share, and Tripadvisor has nurtured Viator as its fastest-growing segment.
Hotel metasearch, which isn’t labor intensive relative to some of other Tripadvisor’s businesses, wasn’t significantly impacted by the layoffs, although Tripadvisor Core overall was most-impacted by the layoffs and restructuring. Of the $18 million in restructuring expenses in the third quarter, $8 million came from the Tripadvisor Core segment, $7 million came from Tripadvisor’s dining reservations platform, TheFork, and $3 million from Viator.
Some of the layoffs at Viator occurred as Tripadvisor moved jobs from Australia to lower-cost markets.
The restructuring and layoffs are part of an overall cost reduction effort at the company. Viator and TheFork have been steadily losing money in recent years, and the company projects that both will be profitable on an adjusted EBITDA basis in 2024.
Tripadvisor has floated the idea of spinning off both companies.
Editor’s Note: The headline of this article has been updated to more clearly reflect planned layoffs by Tripadvisor.
Correction: We erroneously reported that Tripadvisor metasearch was the business mostly heavily impacted by the layoffs. Instead, this article has been corrected to show that it was the Tripadvisor Core segment — of which metasearch is a component — that took the heaviest hit.
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Photo credit: A Tripadvisor ad, Vacations Miss You. Source: Tripadvisor