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Flight Centre announced it is standing down 3,800 Australian employees, as coronavirus restrictions put the travel industry on hold

James Hennessy
  • Flight Centre is standing down 3,800 staff in Australia as part of a plan to cut costs during the coronavirus pandemic.
  • The company says it will remain in contact with staff who have been stood down, and will make some effort to liaise with "a large pool of other potential employers" to redeploy them into other roles in the interim.
  • The company is also setting out to preserve its cash and secure additional short-term liquidity.
  • Visit Business Insider Australia's homepage for more stories.

Travel agent Flight Centre has announced it is standing down 3,800 Australian staff as the company attempts to come to terms with the devastating impact of the coronavirus on the industry.

In a statement to the ASX, Flight Centre announced a "three-pronged" strategy to keep the company solvent through the downturn: cutting costs, preserving cash, and securing additional short-term liquidity.

The announcement that staff would be stood down – or, in some cases, made redundant – is part of the cost cutting portion of the plan. The 3,800 staff stood down in Australia represent a large part of the 6,000 staff affected by the move globally.

“We are dealing with unprecedented restrictions and extraordinary circumstances that are having a significant impact on our customers, people, suppliers and all other stakeholders,” said managing director Graham Turner.

“As a result, we have been forced to make extremely difficult decisions, including temporarily standing down some of our people and cancelling our interim dividend, with a view to preserving more jobs for the future."

The company says it will remain in contact with staff who have been stood down, and will make some effort to liaise with "a large pool of other potential employers" to redeploy them into other roles in the interim.

"These people will have the opportunity to return to [Flight Centre] when conditions improve," the statement from the company reads.

Those stood down will have access to accrued leave entitlements, but will not be paid by Flight Centre once those run out.

In addition to the staffing changes, Flight Centre says it will likely close about 30% of its outlets across multiple brands in Australia. Earlier in March, the company told investors it would bring forward the closure of a number of "under-performing" shops due to the uncertainty of the coronavirus outbreak – a situation which has only worsened in the weeks since.

A $15 million per-month marketing spend will be paused, and the company said it is renegotiating rents for some of its stores.

Earlier in March, Turner said the government's tough quarantine restrictions would "destroy" airlines and cause havoc for the rest of the travel industry.

“I think it is the most amazing thing to do," Turner said at the time. "It’s not going to work. Certainly for airlines it’s going to be devastating."

Since that time, the restrictions have only grown more strict. Travel both in and out of Australia is largely banned except in extraordinary circumstances including the repatriation of Australians living overseas and some aid work in the Pacific.