In what is an ever-changing and challenging landscape for the entire travel industry, Flight Centre Travel Group (FCTG) has this morning announced further significant cuts to its business in response to the impact of COVID-19.
Following earlier and rolling global contingency plans including a current share trading halt, the announcement of store closures and senior leadership salary cuts, FCTG has today announced a further raft of company-wide changes.
In a lengthy and detailed statement to the ASX this morning and a video update to staff, the group outlined its immediate ‘three-pronged’ plan to overcome the evolving challenges posed by the coronavirus.
FCTG says the three-pronged strategy works on defending ‘costs, cash and liquidity’ without jeopardising future growth prospects and maintaining company culture.
Key changes announced include:
- Temporarily standing down around 6,000 global support and sales roles or in some instances making them redundant.
- Temporarily standing down 3800 people in sales and support roles in Australia in the near term.
- Retaining up to 70% of its global workforce with the company saying they will assess the timing and nature of further reductions.
- Short term opportunities available for impacted employees – access up to 10,000 roles in Australia.
FCTG says they will maintain close connections with their people during the standdown period which will be reviewed weekly and will “aim to bring them back to work as soon as the current travel bands and trading restrictions are lifted”.
Also, the group says they have proactively engaged with a large pool of other potential employers to secure immediate access to more than 10,000 sales and call centre vacancies for stood down employees in Australia.
FCTG New Zealand this week had already announced plans to work with a major supermarket chain in New Zealand to offer instant employment for stood down staff.
Speaking about the latest round of changes, Flight Centre Travel Group CEO Skroo Turner said:
“We are dealing with unprecedented restrictions and extraordinary circumstances that will have a significant impact on our customer’s, people, suppliers and all other stakeholders.
“People are effectively unable to travel in the near term either domestically or internationally, and some are unable to be repatriated to their home countries, which is affecting thousands of people and is a problem that we are working to help solve.
“Within this climate, our people have been working tirelessly to help our customers amend their plans, but unfortunately the vast proportion of the work that they would normally undertake has now stopped,
“As a result, we have been forced to make extremely difficult decisions, including temporarily standing down some of our people and cancelling our interim dividend, with a view to preserving more jobs for the future”.
“These people that we are temporarily standing down are a valuable part of our company and, where possible, we aim to bring them back to work as soon as restrictions are lifted and as demand starts to increase”.
Flight Centre Travel Group CEO Skroo Turner
“We remain committed to looking after our customers both during this difficult period – and beyond – and will continue (where permitted), on our websites, via social media and through our mobile capabilities during this time of social distancing”.
The group has also made further cuts including negotiating reduced rental fees with landlords, pausing its $15 million-per-month sales and marketing spend as well as all new projects in the interim.
Read the full ASX report here.
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