Skift Take
Was Booking Holdings getting too fat? With operating costs outpacing revenue growth, something had to give. We might not know the exact chess moves for awhile.
Booking Holdings announced Friday that it will make a variety of “organizational changes,” including layoffs.
The Connecticut-based company, among the largest in travel, didn’t provide specifics on the number of employees who would be affected or the financial impact of the reorganization.
One of the issues is that growth in operating expenses has outpaced revenue growth. It is likely that the company will try to reset priorities in tech investments to stay competitive.
Among the company’s tech priorities are its payments platform, fintech and generative AI.
In the company’s third quarter earnings call last month, Chief Financial Officer Ewout Steenbergen said: “We continue to be very focused on carefully managing the growth of our fixed expenses. We believe it is important to drive greater operating leverage in our fixed expenses as this creates capacity for disciplined investment across our strategic initiatives, which we believe will help drive stronger top line and earnings growth in the future.”
The Booking Holdings announcement on Friday stated: “On November 8, 2024, Booking Holdings Inc. (the “Company”) announced its intention to implement certain organizational changes, including modernizing processes and systems, an expected workforce reduction, optimizing procurement, and seeking real estate savings.”
The financial filing continued: “We believe these efforts will improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to both travelers and partners, and better position the Company for the long term.”
Skift reported this week Booking has built back up its staffing since pandemic lows. Booking has boosted its employee ranks to 24,200 as of September 30, 2024, up 19.2% from the end of 2021.
Because 47% of its staff was based in Europe as of the end of 2023, Booking has to consult with works councils before determining precise workforce reductions.
“As part of a broader transformational program aimed at creating greater opportunities for innovation, improving efficiency and strengthening our long-term financial position, Booking.com is currently reviewing its organizational structure,” a spokesperson told Skift. “While we are still in the early stages of this process and no decisions have been made, we expect to make organizational changes. This is a proactive step to make sure Booking.com remains agile in a very competitive industry and keeps driving customer-centered innovation at pace.”