Marriott To Lay Off Over 600 Employees At Bethesda Headquarters
Marriott International, one of the largest employers in Montgomery County, Maryland, is preparing to lay off hundreds of workers at its corporate headquarters as the pandemic continues to damage the hotel industry.
Marriott in March furloughed two-thirds of the roughly 4,000 employees at its corporate headquarters, and in May it extended those furloughs until Oct. 2. A company spokesperson confirmed to Bethesda Magazine that this week's notice is for layoffs and not furloughs.
Marriott is headquartered on Fernwood Road in North Bethesda, but it sold the 34-acre campus last year as it plans to move into a 21-story office tower in Downtown Bethesda that is under construction.
The hotel giant last month reported a $234M net loss in the second quarter, and its revenue per available room, or RevPAR, in July was down 70%. It said occupancy in its global hotel portfolio bottomed at 11% in April and had recovered to nearly 34% as of the week ended Aug.1.
Marriott Chief Financial Officer Leeny Oberg said on its Q2 earnings call that the company could burn roughly $45M in cash per month going forward if RevPAR continues to decline at 70%. Marriott had roughly $2.3B in cash on hand as of the end of Q2, plus another $2.9B of unused borrowing capacity.
The company's executives did not mention potential layoffs on the firm's Q2 earnings call, but Marriott CEO Arne Sorenson did emphasize the need to cut costs to make up for lagging hotel demand.
"We have had to dramatically cut our costs to match this decline in revenues, while still providing the required services," Sorenson said, according to a Seeking Alpha transcript.