Faced by a travel industry still depressed by the effects of the COVID-19 pandemic, Hilton Worldwide Holdings (NYSE:HLT) announced today it's terminating 2,100 employees from its corporate payroll, reducing the number of people working on this side of the business by approximately 22%. The hotel company says it is also leaving other money-saving measures in place for up to three more months.
Back in late April, Hilton Worldwide took extraordinary measures to safeguard guests from the risk of coronavirus infection. Allying with Reckitt Benckiser (LSE:RB), the maker of Lysol and similar cleaning products, the hotel began employing ultraviolet disinfection, cleanliness seals on room doors, and other measures in an effort to reassure potential guests.
More recently, the company announced it had $3.8 billion in liquidity and strengthening business in China, raising hopes of a rebound. However, Hilton's reported China recovery, with occupancy rates rising from 9% to around 40%, could be put in danger by a fresh coronavirus outbreak in Beijing and the internal travel restrictions that were applied in response.
Today, CEO Christopher Nassetta provided an update, stating: "Never in Hilton's 101-year history has our industry faced a global crisis that brings travel to a virtual standstill. Hospitality will always be a business of people serving people, which is why I am devastated that to protect our business, we have been forced to take actions that directly impact our Team Members."
The more than 2,000 corporate workers losing their jobs will receive severance pay and other support from Hilton Worldwide. Hilton also announced an extension, of up to 90 days, of its current cost reduction measures. These include corporate pay cuts, shortened working hours, and unpaid furloughs of portions of the chain's workforce.