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Lastminute.com to axe 350 jobs
Lastminute.com is to shed 350 staff in a cost cutting drive after admitting the final quarter of the year remained “challenging”.
Chief executive Brent Hoberman told TravelMole the cuts would come as the organisation slims office locations down from 25 to 15 next year.
The reduction in staff numbers from 2,400 is part of an aim to reduce costs by 10% next year.
Mr Hoberman said the cuts were necessary due to duplication of staff roles following the company’s recent spate of acquisitions. More details are due to emerge at the end of September.
News of the job cuts emerged as lastminute revealed that operating costs in the three months ending June 30 has risen to £41.9 million from £25.3 million year-on-year. These costs related to purchases including Med Hotels, First Option, Gemstone Travel, OTC and lastminute.de in Germany over the past 12 months. The acquisition of OTC and lastminute.de added £3.8 million to the cost base in the third quarter.
The company saw profits before tax and financial charges rise by 5% in the quarter from £4.1 million to £4.3 million a year earlier.
Lastminute is to spend an additional £3.6 million on marketing in the July-September peak season quarter to help boost sales and margins.
Lastminute revealed that commission payments to travel agents had risen by more than £3 million to £9.8 million in the three months to the end of June due to the growth in car hire sales and the inclusion of Med Hotels which sells through the trade.
Mr Hoberman said lastminute was still seeing “good organic growth” despite increased levels of late bookings. He highlighted growth in dynamic packaging sales as a key area as the company disclosed that 65% of customers surveyed in June said they preferred independent travel and are designing their own itineraries. The company saw quarterly dynamic packaging sales soar by more than 200% from £5.4 million to £16.5 million year-on-year.
“Whilst the outlook for the final quarter of the financial year remains challenging we remain confident of making significant progress,” said Mr Hoberman.
Report by Phil Davies
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