You can see Tripadvisor’s priorities crystal clear in where its restructuring occurred. Hotel metasearch took the heaviest hit, and Viator was impacted the least.
Tripadvisor laid off around 125 employees, or 4% of its workforce, in the third quarter and the company said last week that additional job trims will take place before the end of the year.
In certain European countries, for example, companies must carry out a process with unions or works councils before they can fire employees. So some employees targeted in the job cut process in the second or third quarter won’t actually leave Tripadvisor until the fourth quarter.
“As of September 30, 2023, the Company had nearly 3,000 employees, which includes employees that are currently the subject of local law and country-specific consultation processes, a decrease of approximately 4% when compared to the second quarter of 2023,” Tripadvisor stated in a financial filing last week.
Tripadvisor stated that the 3,000 employee number “will decline further in the fourth quarter of 2023, as impacted employees leave the Company.”
Hotel Metasearch and Related Features Took the Brunt of the Layoffs
Until recently, online travel agency and hotel advertising tied to Tripadvisor metasearch, or hotel comparison shopping, was the most important part of the company’s business in terms of revenue.
It’s still the largest part of the business, but it won’t be for long.
In the third quarter, the Tripadvisor Core reporting segment, which includes hotel metasearch, Tripadvisor-branded experiences, vacation rentals, restaurants, and cruises, saw its revenue grow just 2%, to $290 million.
In contrast, Tripadvisor’s Viator experiences segment had revenue growth of 41%, to $245 million.
The importance of the Tripadvisor metasearch has been waning as Google Hotels took market share, and Tripadvisor nurtured Viator as its fastest-growing segment.
So the Tripadvisor Core reporting segment took the brunt of the layoffs and restructuring. Of the $18 million in restructuring expenses in the third quarter, $8 million came from the Tripadvisor Core segment, $7 million came from Tripadvisor’s dining reservations platform, TheFork, and $3 million from Viator.
Some of the layoffs at Viator occurred as Tripadvisor moved jobs from Australia to lower-cost markets.
The restructuring and layoffs are part of an overall cost reduction effort at the company. Viator and TheFork have been steadily losing money in recent years, and the company projects that both will be profitable on an adjusted EBITDA basis in 2024.
Tripadvisor has floated the idea of spinning off both companies.