Sabre Corp. chief Sean Menke shed some light on the company’s plans to reduce head count in a major realignment of its business.
During Sabre’s second-quarter earnings call, Menke said the company is reducing head count by about 9% globally under a new cost reduction and business alignment initiative.
The plan centers on “what is actually producing and what is not producing,” he said.
While Menke was not specific about where the carving knife would be applied, it was clear that Airline Solutions was near the top of the list.
“Airline Solutions is the one where we probably spent the most amount of time,” he said during the Q&A period.
Airline Solutions, which along with its sister Hospitality Solutions has provided Sabre with good growth numbers in recent years, had a particularly difficult quarter.
Sabre stopped working on the migration of deeply troubled Airberlin to the SabreSonic passenger services system.
The insolvency of Alitalia, another SabreSonic customer, resulted in decreased revenue.
And long-time customer Southwest Airlines migrated its massive domestic system to the Amadeus Altéa PSS -- a long expected move, but one that still hurt.
Menke expressed confidence in Sabre’s GDS business and in Hospitality Solutions. He also gave a vote of confidence to SabreSonic.
But other Airline Solutions product portfolios have gotten a bit chubbier than is healthy. “This means shifting focus and resources towards SabreSonic and other core products,” Menke said.
Menke said the company has reduced the management layers in the product and technology group “to improve our product owner’s ability to coordinate with greater speed and efficiency across the company.”
Sabre will pare certain functions in Travel Network and Hospitality Solutions that have become duplicative over the years, due in part to acquisitions.
Corporate staff head count was reduced by 12%, Menke said. The company is eliminating certain activities and focusing more directly on functions that support operational and strategic initiatives.
The company reported a net loss of $5.4 million for the second quarter, compare to net income of $73 million in second quarter 2016.
The decrease is primarily the result of a $92 million impairment and related charges associated with the Airline Solutions Air Berlin contract and a $25.5 million charge related to the cost reduction and business alignment program.
Airline and Hospitality Solutions revenue grew 7.8%, to $271.8 million.
Revenue from Travel Network, Sabre’s GDS business, grew 6.3%, to $635.6 million.