Booking.com does not participate in second round of government support

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As of 1 June, Booking.com will no longer make use of the NOW scheme, the emergency package from the Dutch government that meets the wage costs of employees. Head of personnel policy Paulo Pisano announced this to the employees of the Amsterdam tech company on Friday. “By asking for support from certain governments [Nederland en het Verenigd Koninkrijk] we bought time, ”Pisano wrote in a message on the intranet of Booking. “Although we are very grateful for the help, the aid does not solve the problems in the longer term.”

Now that the first emergency package has expired, the way is clear for Booking to announce a termination round. The website is going through the biggest crisis since its inception and saw the number of bookings drop by 85 percent last month. The NOW grant – which pays up to 90 percent of salaries if sales fall by a minimum of 20 percent – is only paid if a company pledges not to fire employees. 17,500 people work at Booking, 5,500 of whom are in the Netherlands.

If Booking had signed up for an extension of the NOW scheme, the company would have been faced with new requirements. For example, companies that receive government support after June 1 are not allowed to pay out profits to shareholders, pay out bonuses or buy back their own shares. The company does not want to respond to the question of how much government support Booking has received.

Also read this research article: Booking is party time: how could the travel giant get in trouble?

Billions of profits

The fact that Booking appealed for support has led the company to criticize trade unions, politicians and consumers in recent weeks. Until this year, Booking made a standard profit of billions, up from 4 billion euros last year. In the first quarter of this year, Booking made a loss of more than 600 million euros.

As a result of agreements with the Tax Authorities up to and including 2019, Booking received approximately 2.2 billion euros in tax discount, due to the innovative nature of the activities, NRC earlier. In the past five years, Booking has also repurchased EUR 20 billion in treasury shares. Booking itself, on the other hand, states that it has also paid billions in taxes in the Netherlands.

Internal tensions

The crisis in which Booking finds itself has led to internal tensions between the works council (OR) and the management of the company. In April, booking chief Glenn Fogel, who speaks to his home-working staff via video calls, announced in April that “likely” employees should leave because of the company’s “dizzying” drop in sales.

Last Monday, Fogel informed his employees about a layoff round at Agoda, a sister company of Booking. 1,500 employees leave a quarter of the workforce. The CEO also promised that, partly due to government support in the Netherlands and the United Kingdom, no redundancies will have to be made at Booking until the end of June. “We will have to keep thinking about what the future and size of the company should be,” said Fogel.

The Works Council and Booking are discussing what a social plan, which should ensure the departure of employees in the right direction, will look like. Employees have now joined the union en masse: hundreds of Booking employees have joined the FNV union in recent weeks.



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https://www.nrc.nl/nieuws/2020/05/22/bookingcom-doet-niet-mee-aan-tweede-ronde-overheidssteun-a4000532

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