Hilton said it is also extending its corporate pay cuts, reduced hours and furloughs for up to three more months.
Photo: Andrew Harrer/Bloomberg NewsHilton Worldwide Holdings Inc. said it is cutting nearly 22% of its corporate workforce globally, in what analysts said is one of the deepest job cuts so far by a major lodging company in response to the coronavirus pandemic.
The job reductions amount to 2,100 corporate employees, Hilton said Tuesday. The hospitality company said it is also extending its corporate pay cuts, reduced hours and furloughs for up to three more months.
“Never in Hilton’s 101-year history has our industry faced a global crisis that brings travel to a virtual standstill,” Chief Executive and President Christopher Nassetta said in prepared remarks.
Hilton’s move is the latest sign that the hospitality industry continues to face headwinds from the Covid-19 pandemic, which caused travel to collapse and occupancy levels to fall below 30% earlier this spring in the U.S.
Hilton shares were up 1.3% in morning trading.
While the U.S. lodging business has picked up a bit in recent weeks, led by leisure travelers taking short trips, corporate and group travel remain subdued. Analysts don’t expect overall hotel revenue to return to 2019 levels until at least 2022, or even later.
“This is the largest (so far) that I have seen,” said C. Patrick Scholes, a senior analyst at SunTrust Robinson Humphrey Inc., referring to the Hilton job reductions. “Hotel companies need to make very difficult decisions in order to cut expenses in light of greatly diminished revenues.”
In May, Hyatt Hotels Corp. said it would lay off 1,300 employees globally, while Marriott International Inc. said last month it is extending furloughs through Oct. 2.
Hilton said the corporate staff it is cutting will get severance pay and access to an expedited recruitment process when travel resumes, as well as other benefits.
Initial jobless claims in the U.S. spiked at the end of March but have fallen since then. The hospitality industry, as people avoided traveling, has been one of the sectors hugely affected by the pandemic.
Write to Allison Prang at allison.prang@wsj.com and Craig Karmin at craig.karmin@wsj.com
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