Sabre Trumpets Cut In U.S. Jobs, IT Services Refocus
<B>Sabre Trumpets Cut In U.S. Jobs, IT Services Refocus</B>
By Jay Campbell
Just as it announced plans last week to purchase GetThere Inc., Sabre Holdings revealed a major cost-cutting initiative that includes a workforce reduction of 1,200 through attrition and layoffs. Sabre also said it would slim down IT outsourcing business, focusing its bid resources on online travel.
Sabre expects the efficiency program to save it approximately $100 million in 2001, and said it would use "a substantial portion" of the money "for purposes of reinvestment in existing and new market opportunities."
"We will direct the majority of our resources and investments to capitalize on the fast-growing electronic travel marketing and distribution area," said chairman, president and CEO William Hannigan. "We will continue to fuel our growth through acquisitions and strategic partnerships with market leaders that have complementary strengths in our target sectors."
Among those opportunities are investments in the online travel marketplace, such as the purchase of Menlo Park, Calif.-based GetThere Inc., Dublin-based Gradient Solutions and Hamburg-based Dillon Communication Systems.
As part of the cost-cutting plan, Sabre will eliminate duplicative activities and leverage its resources for better efficiency. Layoffs and attrition, Sabre said, will take place over the next several months, "with the U.S. being a key focus," according to Hannigan. Sabre now employs 10,500 people.
Sabre also said it would change how it bids for large outsourcing contracts, such as those it has with American and US Airways. "We will partner with complementary IT firms to bid for those types of contracts, allowing us to focus on core competencies in the software application, reservations hosting and Web hosting areas," said Hannigan. "We will no longer go it alone for facility management opportunities."
As an example, he said, Sabre is partnering with another company to go after the Air Canada account, following its merger with Canadian Airlines.
"We expect that this will allow us to produce a more predictable revenue and earnings stream," added Hannigan.
Sabre also recently bought Gradient Solutions Ltd., a technology company whose main products are the "international and highly customizable" CyberCRS+ booking engine and CyberIncentive, an online redemption loyalty program. Gradient now operates as a separate Sabre subsidiary.
Delta selected Gradient to develop its loyalty system for small and medium-size companies, called Business-extra. Other clients include Austrian Airlines, Braathens, KLM, Swissair, The Qualiflyer Group and Thomas Cook.
Further increasing its focus on the European marketplace, Sabre in June took a 51 percent interest in Dillon Communications Systems, an electronic travel distribution service with operations in Austria, Belgium, Luxembourg, the Netherlands, Poland, Switzerland and the United Kingdom.
The acquisition increased Sabre's presence in Germany from 1,000 to 5,900 travel agency locations.
In a separate announcement, Sabre said the Delta-led SkyTeam airline alliance has implemented Sabre Alliance Manager, the product that allows alliance partners to present their offerings, particularly frequent flyer programs, under a single brand in the GDS.
Sabre said the feature maximizes the alliance's visibility by giving travel agents a single code for the alliance and allowing them to filter the display for only flights within the alliance membership.