Agent Layoffs Limited At Onsites

Citing drops in transaction volumes of 35 percent to 40 percent, many travel agencies have cut staffing levels by up to 20 percent, according to reports from buyers and the agencies involved. The layoffs seem to affect agencies of all sizes equally. However, most corporate travel buyers haven't mothballed their onsite agents—yet.

Among the mega agencies cutting staff is American Express, which even before the crisis of Sept. 11 had said it would cut 4,000 to 5,000 workers companywide by the third quarter of next year. Last week, Navigant reported that it has furloughed 20 percent of its 6,000 employees. Philadelphia-based Rosenbluth International said it has released 12 percent to 20 percent of its workers and that all remaining employees have taken pay cuts. Sources at Carlson Wagonlit and WorldTravel BTI reported staffing cuts as well, in what seems to be an industrywide phenomenon.

Smaller agencies also are affected. Bill Chiles, president of the New Jersey-based Hickory Travel Network, an organization with more than 3,200 affiliated offices, said that layoffs and salary freezes characterize operations at these companies, which represent $13 billion in annual airline ticket sales.

Reports as to when agencies expect travel volume to recover vary. Thom Nulty, president of Navigant, anticipated a recovery of up to 90 percent of normal volume for his agency by the end of the year. Other sources said that recovery will take far longer than that. John Snyder, COO of WorldTravel BTI, reported that volume may not return to normal levels until the end of next year. "And if additional terrorist or military acts are taken against the United States, the recovery will take longer," he added.

Andy Menkes, president of Partnership Travel Consulting in New Jersey, said cutbacks in staffing should not affect service levels, as long as the cutbacks are commensurate with changes in volume. He also said the onsite staffers have not been laid off as quickly as other agency workers, since these agents' salaries usually are paid directly by the client corporation, and most companies are not losing revenue as rapidly as the agencies themselves.

Menkes suggested that buyers wait until the end of the first quarter before eliminating onsite staffers. "By waiting until April to make staffing changes," Menkes explained, "buyers will be able to make better judgements about the recovery. If buyers release their onsite agents too quickly, they'll have to rehire new staffers to meet their needs when volume returns, probably at greater expense."

Reflecting statements made by several travel buyers, Deborah Wilson, manager of corporate travel and finance at Johnson & Johnson in Memphis, said that no layoffs of onsite agents are forthcoming at her organization.