Accor to reduce pay, furlough 75% of global head office teams
/Accor reviewed its recurring investment plan for 2020, resulting in a €60m reduction in capital expenditure. The company is further streamlining all other costs, such as sales, marketing and IT, in line with lower systemwide revenues.
Given the current situation, Accor is reducing schedules and/or furloughing 75 percent of its global head office teams for Q2, as well as implementing a travel ban and a hiring freeze. These actions, it estimated, will result in a minimum €60 million reduction in general and administrative expenses for 2020 to mitigate the COVID-19 pandemic’s impact on business.
Accor said it currently has more than €2.5 billion in cash on hand and an undrawn revolving credit facility of €1.2 billion.
Accor is also withdrawing its proposal for a 2019 dividend payment of around €280 million. It decided to allocate 25 percent of the planned dividend to the launch of the ALL Heartist Fund, which will assist:
The group’s 300,000 employees, pledging to pay for the COVID-19-related hospital expenses of those who do not have social security or medical insurance
On a case-by-case basis, furloughed employees “suffering great financial distress”
On a case-by-case basis, individual partners facing financial difficulty
Health-care professionals and nonprofit organizations
Accor board members have collectively decided to reduce their attendance fees by 20 percent to the benefit of this fund. Additionally, Chairman/CEO Sebastien Bazin will forgo 25 percent of his compensation during the crisis with the cash equivalent to also be contributed to the fund.
