In April 2020, trendy New York-based travel brand Away faced a significant drop in sales due to the COVID-19 pandemic, leading to the furlough of half its team and laying off 10% of its employees. In this article, we'll discuss the circumstances surrounding these layoffs, the reasons behind them, and the potential future impact on the company and the travel industry as a whole.
The layoffs at Away were primarily driven by economic pressures and shifts in industry demands due to the COVID-19 pandemic. With the travel industry experiencing a near-total decline, demand for Away's products, such as luggage, bags, and interior organizers, plummeted by over 90%. This significant drop in sales forced the company to make difficult decisions, including furloughing half of its team and laying off 10% of its employees.
To further mitigate the financial impact, Away's founders, Steph Korey and Jen Rubio, suspended their own salaries, and senior leadership agreed to reduced salaries. The company also closed its retail stores as part of internal restructuring efforts. Away provided laid-off employees with a minimum of eight weeks of severance, healthcare coverage through the end of June, waived the vesting cliff on equity, and extended the exercise period of stock options.
It can be inferred that the company is facing significant financial challenges due to the drop in sales. In response to these challenges, Away may be realigning its investments and focusing on specific products or markets to better suit the current needs of the business and optimize for continued growth. This strategic adjustment could potentially position Away for future success as the travel industry recovers from the pandemic's impact.
The retail industry, particularly in the travel-related sector, has been severely impacted by the COVID-19 pandemic. Away's layoffs and furloughs are a reflection of the broader challenges faced by companies in this space. As businesses like Away struggle to adapt to the decrease in travel and sales, the industry may experience a loss of skilled workers and a decline in overall productivity.
However, the support provided to affected employees, such as severance packages and extended healthcare coverage, may help mitigate some of the negative consequences. As the travel industry begins to recover, companies that have strategically adjusted their investments and product offerings may be better positioned for future growth and success.
Away's layoffs and furloughs were driven by the COVID-19 pandemic's impact on the travel industry, leading to a 90% drop in sales. The company's future and industry standing may be affected by these workforce reductions, but strategic adjustments could position it for growth as the market recovers. These developments highlight the broader challenges faced by the travel sector, and Away's response may serve as an example for other companies navigating similar circumstances.
