As it welcomes a new chief executive, Expedia expects cuts following an operational review that will impact 1,500 roles throughout the year, outgoing CEO Peter Kern told employees Monday.
Expedia’s product and technology teams will see the deepest cuts, according to Kern’s memo, as the company looks to “invest in core strategic areas.” The cuts would mean a 9% reduction in the Seattle-headquartered company’s 17,100-employee global workforce.
“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.
Displaced employees will be informed within the next week, Kern’s memo said. A spokesperson declined to say whether all 1,500 employees will be informed of changes next week, or if Seattle-based employees would be impacted.
The travel giant’s brands include booking service Expedia, vacation rental service Vrbo, and hotel booking services Hotels.com and trivago.
Aside from its HQ on Elliott Bay, Expedia has U.S. offices in Chicago, Austin, Texas, and Springfield, Mo. Internationally, it has European offices in London, Prague, Madrid, and Asian offices in Singapore, Tokyo and Gurgaon, India, as well as an office in Sydney.
The cutbacks follow a shift in Expedia’s top leadership. Earlier this month, the company announced Kern would leave the role after four years as chief executive. The incoming CEO, who will take over in May, is Ariane Gorin, who served as the president of Expedia for Business.
Industry watchers have speculated that the leadership change may represent a shift in Expedia’s strategic direction. At the onset of the pandemic, Expedia took on $3.2 billion in debt. Now, the biggest source of Expedia’s growth is Gorin’s group — the business-to-business division which saw revenues grow 33% in 2023 compared with the previous year, according to the company.
“With so much technical achievement over the last 12 months and so much tech debt behind us, we now are obliged to take a close look at roles, skills, teams and locations to ensure that our resources are focused in the right areas,” Kern said in Monday’s memo.
The pace of innovation at Expedia increased as the company consolidated teams and software, Kern told investors in an earnings call earlier this month. He mentioned One Key, Expedia’s loyalty program, which consolidated seven different loyalty stacks into one. He told investors Expedia will be taking One Key international this year as the company sees an increase in customers who shop Expedia brands because of the program.
“We are now a very different company than we were four years ago,” Kern told investors earlier this month.
Under Kern’s leadership, the company bounced from a 57% drop in revenue in 2020 to record revenues in fiscal year 2023. Expedia reported $12.8 billion in annual revenue, representing a 10% increase in 2023 compared to the previous year.
“I know we wouldn’t be where we are today without the contributions of every member of our team,” Kern said in Monday’s memo. “While the needs of a company may evolve, this does not diminish the contributions you have made to our success now and in the future.”
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