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Marriott Cuts Jobs, Sends Thousands On Furlough, CEO Calls Coronavirus Worse Than 9/11

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Marriott Cuts Jobs, Sends Thousands On Furlough, CEO Calls Coronavirus Worse Than 9/11

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Marriott International Inc. (NASDAQ: MAR) and other hotel owners are sending thousands of staff on furlough or cutting jobs entirely due to the coronavirus pandemic.

What Happened

Marriott is furloughing two-thirds of its 4,000 corporate employees at the Bethesda, Maryland head office. Approximately two-thirds of corporate staff abroad will also be furloughed reported the Wall Street Journal, citing a company spokesperson.  

In a video message to employees, Marriott CEO Arne Sorenson said that the hotel’s business was running nearly 75% below normal levels. He calls the present period’s financial impact worse than 9/11 and the 2008 financial crisis combined.

Tens of thousands of staff from managers to housekeepers are expected to be put on a leave of absence as Marriott closes its properties worldwide due to the upheaval in global travel.

Why It Matters

Other major hotel chains are also cutting and furloughing staff. Hyatt Hotels Corporation (NYSE: H) and Hilton Worldwide Holdings Inc.(NYSE: HLT) have announced furloughs. Ashford Inc. (NYSE: AINC) is laying off or furloughing 95% of its staff of 7000 employees, according to the WSJ.

Marriott and Hilton executives, along with others from the American hotel and travel industry, met President Donald Trump last week to discuss $150 billion in direct aid for the hotel sector and an additional $100 billion for related businesses. 

Hotel chains have been struggling to deal with the effects of COVID-19 and have revised their financial outlook due to the pandemic. 

What Else

Hotel rooms are being repurposed to isolate coronavirus patients, including those among the homeless in California.

Price Action

Marriott shares traded 0.70% higher at $75.10 in the after-hours session on Friday. The shares had closed the regular session 11.65% higher at $74.58.

 

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