Hyatt to Furlough U.S. Corporate Employees With Hotels Shut

(Bloomberg) -- Hyatt Hotels Corp. will furlough or significantly reduce the schedules of two-thirds of its U.S. corporate employees as the company cuts costs with the coronavirus outbreak decimating hotel revenue.

The furloughs and work reductions are scheduled to run from April 1 through the end of May and will also affect employees in other regions, according to a spokesman for the company. Hyatt will fund health insurance premiums for the workers, and employees who aren’t sent home will take temporary pay cuts.

Hyatt Chief Executive Officer Mark Hoplamazian and Chairman Tom Pritzker aren’t taking salaries during the furlough period, the spokesman said. The rest of the company’s senior leadership team is taking a 50% pay cut, and the money saved from executive salaries will seed a fund to help employees.

Hyatt, which has been forced to suspend operations at a number of its hotels, is working with companies including Walmart, PepsiCo, and Albertsons Companies to place its staff in jobs “leveraging their skillsets.”

The moves come as travel bans and social-distancing measures force many hotel owners to close properties and lay off hotel managers, housekeepers, and other on-premise staff. Hospitality executives see occupancy rates falling as low as 10%, projecting that the industry will shed more than 1 million jobs in the weeks to come.

Marriott International Inc. has said it will furlough roughly two-thirds of its corporate employees, and ask those who remain to take pay cuts. Furloughed employees will receive 20% of their usual pay to help cover health care and other costs, a spokeswoman said.

Hyatt, whose credit rating was cut by Moody’s on Monday, withdrew its 2020 guidance at the beginning of March.

“We are confident in the resilience and capabilities of our teams to manage through the challenges our industry faces,” Hoplamazian said in a statement at the time.

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