Marriott International is a company that, as CEO Anthony Capuano puts it, welcomes change. However, this transformation involves the termination of over 800 corporate staff members.
A Work Adjustment and Retraining Notification was submitted in Maryland on November 14, indicating that 833 employees are expected to lose their jobs. For more than six decades, Marriott has been a prominent private employer in Montgomery County, where its headquarters are located.
The layoffs are set to take effect on January 3. During the Q3 earnings call last Thursday, Capuano stated, Our business momentum is strong, and as an organization that embraces change, we are continually adapting our operations to foster global growth.
To achieve this goal, we have initiated a comprehensive review aimed at improving our overall effectiveness and efficiency. We aspire to empower our teams who engage directly with our markets, guests, owners, and franchisees to operate more agilely.
Although this process is ongoing, we believe these initiatives will lead to greater profitability and added value. Following Capuano’s remarks, CFO Leeny Oberg noted that at this stage of the initiative, we anticipate these measures will result in annual pre-tax reductions of $80 million to $90 million in general and administrative costs starting in 2025.
Additionally, we expect cost savings for our owners and franchisees from this initiative which may incur approximately $100 million in charges primarily during the fourth quarter of 2024; these will be categorized under restructuring and merger-related expenses as well as reimbursed costs.
With significant growth prospects globally across our over 30 brands, we are confident these actions will enhance our competitiveness. A transcript of the call can be found through Marriott’s official channels.
A spokesperson from Marriott provided a concise statement regarding the layoffs: Earlier this year, we launched a strategic assessment of all facets of Marriott International’s operations globally to improve overall effectiveness across the enterprise; this was discussed during our Q3 earnings call.
While challenging decisions must be made regarding job reductions at corporate offices and continent offices—these changes aim to transform how we operate—they will largely take effect by Q1 2025. As part of this strategy, several hundred new job openings will be created; many impacted employees are likely to apply for these positions and continue their employment with us.
The spokesperson clarified that staffing at hotels is not included in this initiative, adding that eligible employees would receive severance packages along with outplacement support.
When asked about how franchisees and property owners would benefit from this initiative specifically, they replied: While we anticipate delivering savings for our owners and franchisees due to these changes, I don’t have any specific details at present.