A pair of recently downsized Expedia Group employees are shedding some light on recent company layoffs and the events that led up to them.
The Seattle-based online travel agency scaled down its staff by 12%, about 3,000 workers, in February.
The workforce reduction followed the sudden resignation of CEO Mark Okerstrom and CFO Alan Pickerill in December 2019, resulting in chairman Barry Diller overseeing company operations.
A former program manager for Expedia, who spoke under the condition of anonymity and who was impacted by the recent layoffs, recalls a town hall meeting with employees in the weeks after the executive shakeup where Diller discussed job security.
“Somebody asked him if there would be layoffs and Diller said, ‘No, but I think moving forward we'll evaluate, so if you don't want to be here, you shouldn't be here,” the source tells PhocusWire.
When asked to clarify Diller’s town hall comments about layoffs, Expedia declined to comment but instead pointed to a February 24 email sent from the company’s Travel Leadership Team to all employees.
“Today, we are announcing our intent to reduce and eliminate certain projects, activities, teams, and roles to streamline and focus our organization,” the Travel Leadership Team wrote.
“Following our disappointing 2019 business performance and our change in senior-most management, the Travel Leadership Team has spent the last few months determining a better way forward.”
In 2019, Expedia reported an 8% increase in its revenue, gross bookings and adjusted EBITDA.
During Expedia’s recent earnings call in February, Diller contrasted the positive financial results by saying that the company became “bloated” and was “all life and no work.”
However, the anonymous ex-employee says that Diller’s comments “don’t jive with anything that I’ve seen.”
“To hear that we're bloated really disturbs me because we made ourselves that way,” they say. “We have been hiring like crazy over the past year, including since our CEO was let go. It never stops.
“I've seen so many people join the company just in the past few months - who are still there by the way.”
When asked if new hires had been made since Diller took over, Expedia declined to comment.
Heather Simon, a technical product manager who worked at Expedia for more than five years before the recent downsizing, tells PhocusWire: “Barry Diller failed Expedia.”
“He ignored the problems until he decided the only option left was the nuclear one and denigrated his own rank and file and brands while doing it.”
On the Friday before the layoffs, employees reportedly noticed that several meeting rooms in an office building were all booked by HR.
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“Those meeting rooms are hard to get,” says the anonymous source. “I think that it just caught people's attention because all of a sudden all the meeting rooms were gone.”
Rumors circulated among Expedia employees about a big announcement the following week from HR.
“That made me a little nervous,” the source says.
On the night of February 24, news outlets reported about layoffs at Expedia. This was followed by the previously cited email sent to employees from the Travel Leadership Team.
“After consulting with leaders around the globe, we recognize that we have been pursuing growth in an unhealthy and undisciplined way,” the email read.
“The accountability for our results lies with the Travel Leadership Team, and we are committed to fundamental changes in our approach to improve success.”
The email also stated: “Transitions like this are difficult as the impact is felt by teammates, colleagues and friends we have known and partnered with through ups and downs. For those who will be leaving, we thank you for your many contributions to Expedia Group and wish you safe travels as you find your next opportunity.”
Layoffs
The anonymous ex-employee says that the next day, February 25, seemed like just another day at the office.
“Even after the layoff announcement, it didn't seem to change anything,” they say. “People's attitudes seem to be still the same on that Tuesday morning, and it was business as usual.”
That morning, the anonymous ex-employee says they were called into an abrupt meeting with a higher-up leader within the organization.
“I had a pop-up meeting and was called into a room with six or seven other people that I really didn't recognize,” the source says.
“The rest is history.”
The layoffs impacted 3,000 Expedia employees.
Diller ignored the problems until he decided the only option left was the nuclear one and denigrated his own rank and file and brands while doing it.
A spokesperson with Expedia tells PhocusWire: “In geographies where we had clarity on the changes we wanted to make, we started implementing intended changes on February 25 by notifying individuals.
“In others, we are still working through the details of what the proposed changes could mean for local teams.”
The company adds that impacted employees are offered competitive local financial separation packages as well as outplacement support, benefits continuation and the Employee Assistance Program.
The anonymous ex-employee says that the layoffs were unexpected and caught the workers by surprise.
“As an organization last year, we were doing extremely well executing on our goals,” they say. “I think we had a lot of big wins, a lot of larger organizational changes that led to quite a bit of ROI.”
Regarding the layoffs, the anonymous ex-employee says: “For me, it seemed to happen very quickly, and it was very much a shock.”
Simon’s comments reflect the same surprise.
“Everyone, from those who were let go to those who stayed, was completely floored,” says Simon. “My management had no say in whether I was let go or not.”
However, the anonymous ex-employee contends that leadership knew about the layoffs.
“[We heard a] statement when we were being laid off that the Travel Leadership Team had to make some hard decisions and they had been thinking about this for quite a while,” they say.
A spokesperson with Expedia Group tells PhocusWire that an assessment occurred across the entire company before the layoffs.
Both Simon and the anonymous ex-employee agree that the layoffs were widespread across all organizations with the company, though there is a disagreement regarding which employees were targeted for layoffs.
“If people had tenure and were near the top of their pay band, they were deemed fit to cut,” says Simon.
The anonymous ex-employee believes that the decisions were random, saying that employees of different pay levels, tenure and job performance reviews were targeted.
“If I had to guess, it's more about sending a message to everybody else that's there and less about actually reducing the workforce,” the source says.
“If you picked the weak performers, I guess it would send a message that you need to perform very well. But if you pick random people, that really will put people on edge.”
However, a spokesperson with Expedia Group says that the decisions were not made at random.
“We reduced and eliminated certain projects, activities, teams and roles in some locations to streamline and focus our organization,” the spokesperson says. “Based on this work, we identified relevant capabilities we believe are essential for the organization to succeed in the future.”
Past reflections
Looking back, the anonymous ex-employee says that there were challenges at the highest levels of leadership.
“I never really felt like from the very top down that we ever had a clear message of the company's strategic goals,” the source says. “That goes all the way back to days of [former Expedia Group CEO] Dara Khosrowshahi.”
Simon shares similar concerns.
“The problems became more obvious during Mark Okerstrom’s tenure,” says Simon.
“Between having an enormous stable of disconnected brands that the company had not integrated, and in the past year endless talk of a ‘transformation’ with no supportive details, we all knew the company wasn’t doing well, but no one expected what came next.”
The anonymous ex-employee agrees with this assessment of the company’s brands.
My management had no say in whether I was let go or not.
“It's always felt very disjointed to me in that we've acquired all these companies over time, like we inherited the mess of all of these other companies,” the source says.
“It always seemed like we have a ton of companies that don't talk to each other.”
The source adds that “it was heavily siloed for years, but we started seeing those silos being broken down.”
Says Simon: “Mark Okerstrom had not done anything to move the needle since he was installed as CEO, and Barry's job was to monitor that, provide guidance.
“There was a lot of catching up that Expedia had to do, but the company's focus on meta and acquisitions meant that it wasn't ever prioritized.
Simon adds that “the company runs like it's still 2002.”
Looking back at the state of Expedia since Okerstrom departed, Simon believes that Diller “was not interested in the people of the company.
“My first manager there used to tell me ‘Expedia is all about relationships’ but that hasn’t been the case for a year or more.”