(Bloomberg) — Online travel companies don’t expect to cut or freeze jobs, a contrast to the thousands of layoffs at other tech firms, suggesting the industry’s painful retrenching at the beginning of the pandemic has put it in a stronger position now.
(Bloomberg) — Online travel companies don’t expect to cut or freeze jobs, a contrast to the thousands of layoffs at other tech firms, suggesting the industry’s painful retrenching at the beginning of the pandemic has put it in a stronger position now.
“We don’t intend to change anything about our hiring plans the next 12 to 18 months regardless of the economy,” Airbnb Inc. Chief Executive Officer Brian Chesky said on a call with analysts Tuesday to discuss third-quarter results.
Before the downturn this year, Chesky said the home-rental company planned to increase its headcount of 6,000 people by 7% to 8%. In an interview with Bloomberg TV, Chesky said, “We’re not pulling back. In fact, we’re stepping on the gas.”
Job cuts and hiring freezes have picked up pace throughout the tech industry as higher interest rates squeeze consumer spending and pummel company shares. Just this week, payment processor Stripe Inc., ride-hailing company Lyft Inc. and Apple Inc. tapped the brakes on hiring. Stripe, one of the world’s most valuable startups, said that it “grew operating costs too quickly” and underestimated the likelihood of a slowdown.
In some regards, those companies are going through what Booking Holdings Inc., Expedia Group Inc. and Airbnb went through in 2020 as Covid-19 put an end to travel. Airbnb lost almost all of its business in the early days of the pandemic, forcing the company to cut a quarter of its staff. Expedia went through a similar transition, eliminating 3,000 jobs in the early part of 2020 as part of a planned restructuring overhaul. Now, with a simpler organizational structure, CEO Peter Kern sees room to add employees again.
“We’ve been able to maintain our headcount at a level we feel good about and we think we can grow massively on top of that without having to add lots of bodies to be able to do it,” Kern said on a call with analysts Thursday.
In the summer of 2020, Booking said it would lay off as much as 25% of its workforce. The company wants to continue to invest in hiring, but is cognizant of the economic background, Chief Financial Officer David Goulden said on a call with analysts Wednesday.
“We’re not going to pull back anything strategic from what we want to do if we have a short-term slowdown,” he said. “But of course, we are looking at how many people we add and where we add them to make sure we are adding them against the things that really matter most for the business as you would expect us to do.”
While all three companies reported record revenue in the third quarter, the prospects for tough times ahead have made investors cautious on the sector. Airbnb and Expedia have slumped about 43% and 49% so far this year, outpacing the S&P 500’s decline of 22%, while shares of Booking have fallen around 22%. Despite Chesky’s confidence, Airbnb’s stock plunged earlier this week after the company said it expects bookings will “moderate” this quarter. Average daily rates are also set to soften as the dollar remains strong and consumers sign up for cheaper destinations.
Still, the sector may be able to cope with a mild economic contraction.
“Travel has been resilient and there’s reason to believe it can endure barring a severe recession,” said Dan Wasiolek, an analyst at Morningstar Investment Service. “There’s some case that can be made that travel could prove to be a little more resilient and they haven’t been as aggressive in hiring as other areas of technology.”
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