Sabre Corporation provides technology and software solutions for the travel industry. Sabre stated a strategic plan during its first-quarter earnings call in 2023. The business desired to adapt and survive in a competitive global market. It plans to realign its firm for long-term profitability by strengthening its core businesses and implementing cost-cutting measures. This article is all about sabre layoffs.
In reaction to these factors, Sabre Corporation cut its global workforce by 15% in 2023. The company realized that streamlining its staffing structure across all 55 global branches was critical. With over 7,500 employees by the end of 2022, the layoffs would affect around 1,100 people across all corporate sites. It was estimated that in the second half of 2023, these layoffs would save $100 million.
There was no news about the layoffs at Sabre in 2024. In this article, let us explore Sabre’s layoffs more.
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What went wrong?
Sabre Corporation is a travel technology business based in Southlake, Texas. It is the leading provider of global distribution systems (GDS) for air travel bookings. Sabre was founded by American Airlines in 1960. The business was spun off to become an independent firm in 2000.
Sabre still has a long way to go before restoring its pre-pandemic power. That was obvious from its 2023 annual report. The report included the company’s financials and other facts about the firm. It includes layoffs executed last year and tech investment plans.
Sabre’s revenue in 2023 was $2.9 billion, approximately $1 billion less than in 2019. Sabre’s core business is to provide flight data to travel sellers, who then use the data to sell flights to customers. Saber charges the airline a fee when a travel agency uses the platform to book a flight.
In 2023, 302.7 million flight bookings were made through the Sabre system. It was down roughly 40% from 2019. Though that figure has increased since the outbreak, Sabre stated in its annual report that air distribution volume has stopped.
These declines are due to a variety of factors. This includes
- macroeconomics,
- delayed travel recovery in some parts of the world,
- worldwide wars, and
- less business travel.
Expedia Group has previously stated that it is moving much of its business away from Sabre. Thus, it has an impact on those figures. Other agencies have switched between Sabre and rivals for a variety of reasons. This includes a desire for greater negotiating leverage.
Airlines have pushed for more direct sales, bypassing third-party suppliers and intermediaries such as Sabre. Among other issues, revenue has been impacted by airline sector consolidation and the growth of low-cost carriers. It prompted certain airlines to ask for lower prices during contract revisions.
“We believe these changes will materially negatively impact our financial results and liquidity. Also, we expect this adverse effect to continue,” Sabre stated in its annual report. Sabre expects revenue to exceed $3 billion this year.
Layoffs at Sabre
According to Sabre’s annual report, the company spent $72 million in 2023 on a business restructuring plan. That plan involved laying off 15% of the workforce. Kurt Ekert announced the layoffs in May, shortly after he was appointed CEO.
Sabre employed 6,232 people worldwide at the end of 2023. That is a decline of roughly 1,300 employees from the previous year. Employee severance payments accounted for about $66 million of the total restructuring costs.
Sabre continues to predict that the restructuring will save the company over $200 million yearly. The company does not anticipate significant additional costs from this. However, it raised a few concerns about the proposal in its annual report.
The business is stated as
“Our cost-cutting plan may be harmful to our operations. Also, our staff reductions may result in unexpected effects. It includes attrition beyond planned workforce reductions, increased daily operations challenges, and worse employee morale. Employees not affected by the reduction in force may seek alternative employment. They also need contract support at an unexpected additional cost or to reduce productivity.”
“Our workforce reductions could impact our ability to attract and retain qualified employees. Furthermore, our cost-cutting efforts may not achieve the expected savings and improvements. This is due to unforeseen issues, delays, or costs.”
Now, Sabre continues to migrate all of its systems to Google Cloud. It’s a multi-year project that the business claims will result in significant cost savings by 2025, while savings have already begun.
Sabre stated that it knows that competitors constantly enhance technology to adapt to a rapidly changing environment. So, it must do the same to remain relevant.
Conclusion
Sabre is one of many travel technology companies that have had to lay off staff. The layoffs are part of Sabre’s bigger restructuring drive. It was because the company faced increased competition from rivals like Amadeus and Travelport. In addition to the layoffs, Sabre has faced several other issues in recent years.
2019, the company lost a significant deal with American Airlines to rival Amadeus. Sabre has also struggled to compete with fresh rivals in the travel technology business, including Google and Amazon.
Despite these issues, Sabre remains an essential rival in the travel technology sector. The business can capitalize on the travel industry’s long-term expansion. Sabre is also investing in emerging technologies like artificial intelligence and machine learning to remain competitive.
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