RealTime IT News

Travelocity.com Cuts Staff by 10%

Following a few weeks of uncertainty about the way Sept. 11's terrorist attacks would affect the travel industry, Fort Worth, Texas-based Travelocity.com Friday said it would cut its staff by 10 percent, or 320 employees.

The cuts, 35 of which came today, and 285 of which will be phased out at when its Sacramento, Calif. call center is closed within the next 60 days, include a hiring freeze, as well as a paring of ad spending. Travelocity.com competes with Priceline.com , Orbitz and Expedia in what was a lucrative online travel sector.

Terrell B. Jones, president and chief executive officer of Travelocity.com, said that as of last week airline ticket sale volumes were 30 percent less than what they normally are. Despite the fact that they have been improving, Jones said his company was being prudent because "it is too early to gauge where overall bookings will stabilize."

"Reductions in staff are difficult in any situation and particularly difficult in this one because our entire team has rallied to support our customers during the recent tragic event," said Jones.

Management will review third quarter results and provide fourth quarter guidance on Wednesday, October 17.

Norwalk, Conn.-based rival Priceline.com, on the other hand, said demand for its services is recovering faster than expected after the attacks on the U.S. It now expects third quarter 2001 revenue to be at the high end of previous guidance of $280 million to $300 million. Another bright spot for the travel sector was an announcement from USA Network's Barry Diller that his company's acquisition of travel operation Expedia will not be deterred.

Others in the sector didn't fare as well; Lowestfare.com, a Las Vegas-based Internet airline ticket sales service, laid off 400 people Sept. 28. Before that, Orbitz, which is funded by five major airlines, trimmed 13 of its 170 staff members and is shaving costs by as much as 50 percent for the rest of the year.