Expedia Group to Cut 1,500 Jobs, 8% of Workforce, Amid Company Restructuring

Travel technology company, Expedia Group Inc. is set to lay off about 1,500 employees or 8% of its workforce, its outgoing CEO Peter Kern informed employees late on February 26, per Market Watch. The statement from the company says it is looking to “recalibrate resources” amid the ongoing restructuring of the firm. The online travel company headquartered in Seattle, aggregates travel fares, flight bookings and lodging from its platforms, and had about 17,100 employees in over 50 countries last year.

“The business continues to evaluate the appropriate allocation of resources to ensure the most important work continues to be prioritized,” an Expedia Group spokesperson said in an email, according to The Seattle Times. The impacted employees will be informed within the next week, according to Kern’s memo. However, it is unclear if all the 1,500 displaced employees will be informed at the same time or if only the Seattle-based employees will be impacted.

Earlier this month, the company reported better-than-expected quarterly earnings, but made a surprising announcement of a CEO change. The firm’s stock is down 11% so far this year, according to Market Watch, and they remained flat in the after-hours session Monday.

The cutbacks follow the shift in Expedia’s top leadership, as current CEO Kern would leave the role after four years. The incoming CEO, Ariane Groin who has been with the company for a decade will take over on May 13, 2024.

Expedia also owns brands like the vacation rental service Vrbo, and hotel booking services Hotels.com and Trivago. Apart from its HQ on Elliott Bay, Expedia has offices in Chicago, Austin, and Springfield. Further, it has European offices in London, Prague, and Madrid, and Asian offices in Tokyo, Singapore, India as well as in Sydney.

Expedia’s restructuring efforts

The firm in a regulatory filing said that it expects the restructuring will cost the company about $80 million to $100 million in total pre-tax charges and cash expenditures, as per Fox Business. Most of this will be allocated towards employee severance and compensation benefit costs.

Previously, Expedia released quarterly earnings that exceeded the expectations of investors. The company posted fourth-quarter adjusted earnings of $242 million, or $1.72 per share, compared to analysts’ consensus estimate of $1.68 a share, per MSN. The revenue of the company jumped by 10% to $2.89 billion in the period. Furthermore, gross bookings for the quarter also grew by 6% to $21.67 billion, falling slightly short of the $22 billion projection.

However, in a separate statement, the company revealed its restructuring plan and announced that CEO Peter Kern had resigned from the role and would be replaced by company insider Ariane Gorin. Gorin formerly served as the president of the company’s business-to-business (B2B) arm, Expedia for Business. She will also assume a seat on the board of directors.

Outgoing CEO, Peter Kern led the company since 2020, and after the restructuring, he will continue to serve as Expedia's vice chairman and member of the board. To ensure a smooth transition, Kern will also be working closely with his successor, Ariane Gorin, the company said.

As per The Seattle Times, industry experts have speculated that the leadership change may represent a shift in Expedia’s strategy. When the pandemic hit the country, the firm took on about $3.2 billion in debt and currently, Gorin’s group, the B2B wing of the company is the biggest source of the firm’s growth. The division’s revenue grew by 33% in 2023 compared to the previous year.