EDITOR'S COMMENT
• Amid the talk of job cuts, labour shortages and recessions, we could be forgiven for thinking we were back in March 2020. That is why the news that Sonder is laying off around 250 employees [corporate / frontline staff] will hit home to many.
Having closed a SPAC merger with Gores Metropoulos II in January, Sonder's share price has plummeted by more than 84 per cent in six months to a 1.51 USD low. Now the lodging firm is promising a business restructuring that will enable it to cut $85 million in costs each year and reach positive cash flow by 2023.
To achieve this, Sonder will adopt a more capital light model and focus investment on existing markets, while honing in on corporate travellers, groups, Gen Z and millennials.
Somewhat paradoxically, Sonder's executives remain optimistic about the travel industry in general, with overall revenue and REVPAR expected to rise in the next quarter. The company - and the travel and hospitality industry in general - is not alone in feeling the pinch, though.
Across micro-mobility, tech and cryptocurrency, firms are announcing widespread layoffs or slowing hiring to cut costs and restructure their organisations, notably unicorns such as Uber, Meta, Tesla and Clubhouse. Rising inflation rates and slowing demand have been cited as key reasons, but with more potential economic downturn on the way, we can expect more difficult decisions from companies in those sectors in the coming weeks.
• Following Pitch to Paul last week, we're back for a RockSTRz session next Tuesday 21 June [4pm BST] as we explore how traditional leisure businesses can crack the business travel segment. Join Carrie Hartman [RESIDE], Melania Tovar [ALTIDO] and I for another insightful discussion at no cost by registering here.
• Please click here if you have a story you want us to tell the industry, or you would like to take part in a feature, podcast or webinar.
For more information and sponsorship / creative solutions advice, contact us at info@internationalhospitality.media.
