Travel technology company, Sabre Corporation has announced that it will introduce measures to strengthen its financial position in response to the current industry conditions. As the coronavirus outbreak worsens, the travel industry continues to be negatively impacted. The government directives that have been enacted have also caused major losses to the travel and tourism industry.
Cost reduction measures to help tackle uncertain business climate
Several cost reduction measures have been introduced during this uncertain time. These measures include a temporary reduction in base compensation pay for its US-based salaried workforce, including a 25 percent reduction for its CEO, and Sabre will work with international employees on a country-by-country basis. Further, there will be a reduction in the cash retainer for members of its Board of Directors.
Additionally, Sabre’s 401(k) match program will be temporarily suspended for US-based employees who contribute to its 401(k) program. On a global basis, Sabre is offering voluntary unpaid time off, voluntary severance and a voluntary early retirement program, and Sabre is reducing third-party contracting, vendor costs and other discretionary spending.
Sean Menke, President and CEO, said in a statement: “This is an unprecedented time. The global travel industry is facing challenges beyond what has been experienced before. We believe Sabre is well-positioned to navigate this challenging environment. We are fortunate that significant aspects of our cost structure are variable and are taking steps to help align our other costs with the current demand environment.” He added, “We have identified and are in the process of removing over $200 million in cash costs from the business in 2020. Given the magnitude of travel decline and the unknown duration of the COVID-19 impact, we will continue to monitor travel activity and take additional steps should we determine they are necessary.”