Sabre SABR intends to lay off employees as part of its major restructuring plan, which includes the realignment of the company’s airline and agency-focused businesses. The strategy will help the firm focus on providing retailing, distribution and fulfillment services to airlines and hotels.
Per the company, the decision will impact approximately 800 workers across 43 office locations worldwide. Sabre expects to complete the termination process on or before Jul 6, 2020. The strategic move follows the 400-staff reduction in April from voluntary severance and voluntary early retirement programs.
Preserving Cash Amid Coronavirus Crisis
Sabre provides technology solutions to the travel and tourism industry across the globe. The coronavirus-led lockdown situation and travel bans have choked the travel and tourism industry, which is hurting the company’s business.
Therefore, the company announced a string of measures this March, which include pay cuts, and suspension of dividend and share repurchases, in an effort to preserve cash and maintain ample liquidity amid the turbulent business environment.
Sabre Corporation Price
Sabre Corporation price | Sabre Corporation Quote
On Mar 20, the travel software company announced that it would cut 25% of the salary of its U.S. employees as well as CEO Sean Menke. Sabre also noted that the pay cut is a temporary measure to combat the crippling impact of the coronavirus crisis on its finances.
Furthermore, Sabre had decided to temporarily suspend its 401(K) program for U.S. employees. Also, the company will reduce the cash retainer for its board members. Globally, the firm is working out salary plans on a country-by-country basis. Such preemptive measures are anticipated to save more than $200 million in costs for this Zacks Rank #4 (Sell) company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Coronavirus Crisis Wreaking Havoc on Global Economy
The coronavirus outbreak has not only claimed human lives but is also wreaking havoc on the global economy. It is affecting global trade, investment, tourism, and supply chains.
Companies are facing unprecedented challenges and taking stringent measures to counter this crisis. Suspension of production, forced leaves/layoffs and cost cutting are becoming commonplace. Despite policymakers’ best efforts, companies are finding it difficult to stay afloat amid such trying times.
To preserve cash and maintain ample liquidity, various companies are resorting to dividend cuts and stock-buyback suspensions. The U.S. automaker, Ford F, scraped its quarterly dividend payment in March.
In April, Yelp YELP also announced that it would lay off and furlough more than 2,000 employees, in an effort to save cost and stay afloat amid the crisis. Last month, cruise operator Carnival Corporation CCL announced the lay-off of 820 employees, and cut salaries and work weeks in Florida.
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