In an ASX release this morning, Helloworld Travel Limited (HLO) has announced a further range of changes in what the group says is “to mitigate the impact of the unprecedented and rapidly evolving COVID-19 landscape”.
As of 5pm tomorrow, Tuesday 24 March, 1,300 or 65% of the Helloworld Group workforce across all countries will begin to be stood down.
As part of the changes, 275 redundancies will be made in various countries at an estimated cost to the business of AU$1.4 million.
The group says the stand-down of the workforce will continue for an initial period of ten weeks to 31 May.
All remaining personnel will with immediate effect, be offered reduced working hours and this will be further assessed depending on work volumes in the weeks and months ahead.
The personnel reductions are due to what Helloworld says are the “rapid de-escalation of international and domestic travel with a decline in demand for services”. They also say that they anticipate that this not changing “until the rate of infection is declining in our region and elsewhere and a vaccine is either available or on its way with some degree of certainty”.
In addition to the personnel changes, the group CEO Andrew Burnes and Executive Director Cinzia Burnes will take no salaries for the next three and a half months to 30 June 2020;
Direct reports to the CEO will also have a further 15% reduction for the same period making their total reduction 40%.
Rents are also currently being negotiated with landlords with the group saying that many have already agreed to favourable terms over the next six to nine months.
Helloworld will also cease all discretionary and project expenditure until further notice including marketing and advertising.
The aggregate of these measures will significantly reduce HLO’s monthly outlays by approximately 80%.
In the statement to the ASX, the group went on to thank “our personnel, partners and our customers for their amazing support at this very difficult time”.
It’s important to note that these changes are mostly in head office and the wholesale operations globally with only some company-owned stores affected. The majority of the franchise retail stores and agents throughout Australia and New Zealand continue to trade under the new conditions.
Read the full ASX release here.
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