In July 2020, Booking.com, the largest brand in the Booking Holdings portfolio, announced a restructuring plan that would result in a workforce reduction of up to 25 percent, affecting around 4,300 employees. The COVID-19 crisis' impact on the travel industry prompted these job cuts. In this article, we'll discuss what happened, why it happened, and the potential future impact of these layoffs.
Booking.com's decision to lay off up to 25 percent of its workforce was primarily driven by the impact of the COVID-19 pandemic on the travel industry. The company, which relies heavily on its lodging business, was hit hard by the crisis, leading to the need for job cuts. Booking.com's CEO, Glenn Fogel, acknowledged the significant effect of the pandemic on both the travel industry and the company's business. The downsizing was expected to align with the company's projections for the future of travel.
In addition to the pandemic's influence, Booking.com's restructuring plan also aimed to allow the company to focus more on strategic areas of competitive advantage. This involved outsourcing all customer service operations to Majorel, a Luxembourg-based customer service outsourcing firm. Affected employees were given the option to work at Majorel with a minimum six-month contract or lose their jobs. Booking.com transferred 12 of its 14 internal Customer Service centers to Majorel, retaining only its internal support centers in Amsterdam and Manchester, UK.
While the financial implications of the layoffs on Booking.com are unclear, the restructuring plan suggests that the company expects cost savings from this decision. Post-layoffs, Booking.com is outsourcing customer service operations to focus on strategic areas of competitive advantage. The partnership with Majorel will enable Booking.com to continue meeting the needs of customers and partners as it expands its offering across multiple travel products and services, positioning the company for future success by leveraging Majorel's expertise in customer experience.
Booking.com's layoffs and restructuring, driven by the COVID-19 pandemic, may signal a smaller future for the travel industry. Despite job cuts, Booking Holdings is considered to have greater long-term strength compared to rivals like Expedia Group and Trip.com Group. The layoffs could lead to a more streamlined and focused approach for Booking.com, as they outsource customer service operations to Majorel and concentrate on strategic areas of competitive advantage. This may position the company for future success, but the overall impact on the travel industry remains uncertain.
Booking.com laid off 25% of its workforce due to the COVID-19 pandemic's impact on the travel industry, aiming to focus on strategic areas of competitive advantage. Outsourcing customer service to Majorel, the company seeks a more streamlined approach for future success. These layoffs may indicate a smaller future for the travel sector, with Booking Holdings potentially having greater long-term strength compared to rivals. The company's future actions could further reshape the industry landscape.
