Travel startups begin laying off employees. They won’t be alone
While delivery services and Zoom are bursting at the seams in this work-at-home economy, startups that promised to transform the state of travel are hurting badly.
Last valued at $4 billion, TripActions laid off 350 employees Friday via Zoom, sources told Fortune. The Wall Street Journal reports the layoffs consist of about one-quarter to one-fifth of the total company. The corporate travel planning company said in a statement: “We’ve cut back on all non-essential spend and made the very difficult decision to reduce our global workforce inline with the current climate.”
Wanderu, which aggregates intercity bus and train information, also tells Fortune that it has put a third of its 40 or so employees on unpaid leave in a bid to lengthen its cash runway. “We needed to make some very difficult decisions that would allow us to minimize our current costs as much as possible and give our company the ability to get through these uncertain times,” Wanderu CEO Polina Raygorodskaya said in a statement.
And Silverlake-backed Vacasa, which helps manage and stage short-term rentals, has laid off “hundreds,” per sources and confirmed by the company. Vacasa, which had 6,000 employees prior to the development, declined to say exactly how many employees had been let go, but added: “Our CEO is not taking any salary, and our leadership team is taking a 50% reduction in salary through the end of the year.”
Amid this downturn, the travel industry is trying to strike as optimistic of a tone as it can about what comes after, when companies will seek to travel again.
“We look forward to when the strength of the global economy and business travel inevitably return and we can hire back our colleagues to rejoin us in our mission to make business travel effortless for our customers and users,” a TripActions spokesperson said in a statement.
The thing is—will those laid-off employees stick around and wait for the still uncertain end of this pandemic? Fortune reached out to former employees who say they are already on the hunt for new jobs. And in this environment, they’re looking for positions in more financially stable or established companies that aren’t as likely to be affected by the coronavirus.
I have no doubt that more cuts are to come—including those outside the travel industry—especially as the World Health Organization warns that the U.S. could be the next epicenter of coronavirus.
Hot stuff: This company’s core business focuses on refining oil—but now America’s big tech is looking to own a part of it. According to sources interviewed by the Financial Times, Facebook is seekinga 10% stake in Reliance Jio, an Indian mobile internet services provider and ecommerce giant, valued at about $60 billion by one analyst. The company launched in 2015 as a subsidiary of Reliance Industries, a conglomerate founded by India’s wealthiest person that got its start in textiles and oil refining. Talk about pivoting.
Facebook isn’t the only one trying to broker a deal in the hopes of entrenching itself in the world’s second largest mobile market. FT, which caveats that the deal could be impacted by the coronavirus, also reports Google has been in talks with Reliance Jio, and Microsoft announced last year it would partner with Jio on cloud services.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
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