Hotel group Accor to cut 1,000 jobs after coronavirus loss

The Covid-19 pandemic has led to the closure of several Accor hotels around the world. PHOTO: REUTERS

PARIS (AFP) - France's Accor, the world's sixth-largest hotel chain, said on Tuesday that it was slashing 1,000 jobs worldwide in a major cost-cutting plan accelerated by the effects of the coronavirus pandemic.

The group, which runs high-end chains such as Raffles and Sofitel and budget brands like Ibis, plans to cut costs by €200 million (S$324 million) by 2022, the French news agency AFP reported.

Accor is the largest hotel operator in Singapore, currently managing 26 hotels. Aside from Raffles, Sofitel and Ibis, it also manages Swissotel, Fairmont Singapore, Novotel and Mercure.

When contacted, a spokesman from Accor's Singapore office told The Straits Times: "This reorganisation is specifically targeted at our global corporate offices. As yet, no jobs have been lost in our corporate office in Singapore."

The pandemic has led to the closure of several Accor hotels around the world and 1,000 of the group's employees will lose their jobs, financial chief Jean-Jacques Morin said.

He said the company employs 18,000 people at headquarter level. Accor, which operates more than 5,000 hotels in 110 countries, could not yet specify where the job cuts would be, Mr Morin added.

Accor has around 320,000 employees in its network worldwide.

"It is difficult to implement cost-saving measures in our industry without (these) having an effect on staff," Mr Morin said in a telephone interview. "We will help them," he said, referring to those to be laid off.

Travel industry news website Skift cited Accor chief executive officer Sebastien Bazin saying that if any of its workers with salaries below €50,000 were affected by the cuts, they would still be paid and kept on the Accor payroll for at least two years, where they could also undergo training.

"No way are we leaving underprivileged people on the streets of the world today," he said.

Accor posted half-year net losses of €1.5 billion against a profit of €141 million during the same period last year.

Turnover plunged to €917 million. This is down 52.4 per cent compared with the first half of 2019, Skift reported.

"The bad half-year results reflect the extraordinary environment linked to the coronavirus crisis," Mr Morin said.

Accor CEO Bazin said: "The shock that our industry is experiencing is both violent and unprecedented.

"The peak of the crisis is undoubtedly behind us, but the recovery will be gradual. Having taken these emergency steps, we must now finish the job from an asset-light model to a full asset-light company."

Accor, in an update on its website, said 81 per cent of its hotels have reopened their doors and business is gradually ramping up again.

"We never actually stopped growing either, as we continued to bring on new hotels over recent months, adding 12,000 new rooms to our portfolio, bringing it up to 5,100 hotels and 748,000 rooms," it said.

"Our hotels are now ready to welcome a different kind of clientele that is seeking leisure activities, domestic tourism and a lower level of business travel," it added, stressing strict hygiene and prevention measures in place to ensure safety.

In a video update, Mr Bazin said the company's best strength was its human capital - the 320,000 people working for Accor.

"They are not only good, but they are caring, they have the expertise, and they have the robustness to accept the crisis," he added.

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