US-based hospitality firm Hyatt Hotels Corporation announced plans of laying off more than 1,300 employees as part of its desperate restructuring plan. Despite experiencing a rebound in its stock prices last month, Hyatt revealed in a press release on Monday that it will officially be letting go of some of its employees starting on June 1.
The company's press release clearly stated that the affected employees will be eligible to receive severance pay. This means that the employees will be permanently let go and the measure isn't simply additional furloughs. In March, Hyatt had furloughed and cut the pay of around two-thirds of its total global workforce. The decision was made in response to the sudden and sharp decline in demand for its hotel rooms due to the continued spread of the coronavirus pandemic.
After it furloughed and cut its employees' pay, the company had urged those affected to immediately seek unemployment benefits. Hyatt had also stated that it was doing everything it can to shore up its finances to ensure its survival during the crisis.
Meanwhile, the company had also shut down most of its hotels, particularly those in heavily affected areas. During its first-quarter earnings call, the company revealed that more than 103 of its employees were confirmed to have contracted the disease. So far, six of those confirmed cases have died and hundreds of its employees are still in quarantine.
In its latest statement, Hyatt claimed that its recovery is moving at an unexpectedly low pace, which is why it had decided on even more drastic financial measures. The layoffs it had announced are part of a massive restructuring plan that would affect its operations worldwide. The company believes that a global reshuffle will be necessary to make sure that it doesn't go under as the economic downturn will likely last longer than expected.
Hyatt President and CEO, Mark Hoplamazian, stated in the press release that it was "excruciating" to let go of his colleagues but the company has to face commercial realities. It will apparently no longer be viable to keep such as large workforce and it had to do what was necessary for the company to fulfill its purpose and to continue serving its customers once the crisis is over. Hyatt stated that it is providing support to terminated employees, most of which will be receiving assistance in finding new jobs through its "outplacement services."
As of September 2019, Hyatt had over 100,000 employees throughout its worldwide operations. The company owned nearly 900 properties under its 20 brands located in 60 different countries.
