BCD Travel To Announce Layoffs To Offset Market Softness

BCD Travel next week internally will announce various cost-saving initiatives, including a further reduction in headcount amid continuing deteriorations in the corporate travel industry, an official from parent company BCD Holdings told BTN today.

"Early in 2008, when we saw that things were going to change, we started adapting the organization," said spokesperson Mario Bruna. "We were able in time to adjust the cost structure of the organization to the new market situation. We are going to continue."

Meanwhile, BCD Holdings, which also is the parent of travel-related companies Park 'N Fly and TRX, this week announced it increased its total sales 4 percent to $15.6 billion in 2008. Last year's earnings before interest, taxes, depreciation and amortization increased 3.3 percent to $124 million and $6 million will be deducted as part of reorganization costs.

BCD Travel, which accounts for 80 percent of its parent's business, had $1 billion in new sales in 2008, according to Bruna. For the first time, the travel management company generated more than 50 percent of its sales outside of the United States.

"We are pleased with the results we have achieved, but we are also conscious of the effects of the ongoing worldwide economic decline," BCD Holdings and BCD Travel CEO Joop Drechsel said in a statement. "By early 2008, BCD Holdings was already preparing for a potential economic downturn by introducing efficiency plans, capitalizing on organizational synergies and establishing hiring freezes. As a result, when business activity began slowing down in October 2008, BCD Holdings' cost-management activities had already taken that decline into account. In 2009, the company will focus on additional cost-reduction plans, including reduction in staff, which, unfortunately, will not solely be absorbed by natural attrition. Furthermore, new revenue stream opportunities will be added to ensure a strong foundation as we emerge from the economic downturn."

Bruna would not disclose details of previous or future headcount reductions or other initiatives. The company also did not provide an outlook for the rest of 2009. "We have seen already in the first two months of the year that we were starting on the level of the entire industry at 15 percent to 20 percent lower and very quickly we were catching up," Bruna said. "In a matter of weeks, we were only a few percent below last year."