Today was one of the toughest days in recent memory for Lonely Planet, both in our digital department and around the organisation. This is the email from our acting CEO that summarised the events.
A message from Lonely Planet acting CEO, Stephen Palmer, about recent changes within the company.
Today we had to announce some difficult decisions in response to the prolonged and deep economic downturn. Over the past 24 hours we have had conversations with around 40 people globally to let them know their role is redundant. There are a further 10 or more roles that we will no longer recruit for. In addition we have also announced a pay freeze effective immediately.
These announcements have affected people in all of our three main offices, and of course the pay freeze impacts everyone. This is a terribly difficult time, particularly for those whose jobs will be made redundant. Whilst we talk about roles, of course we are talking about real people, people we know and work closely with. The decisions taken today in no way reflect on them, their ability, talent or experience. I would like to reiterate that I would not have taken this action if there was any way I could have avoided it. Equally I want to reassure everyone that Lonely Planet will do what it can to make sure that those affected get the support and help they need over the coming weeks. We’ve tried to make sure that our approach means that this is the only major redundancy announcement we need to make. No-one knows what the future holds or can make any guarantees, but this step is our best effort at protecting ourselves from further cuts.
Since last July, we have focussed on reducing our operating expenditure wherever possible, cutting back on activity where prudent, and revising the scope of new projects. But the economic crisis has deepened, taking a severe turn for the worse in November. Guidebook sales are down, and advertising revenues online are also weakening. That is why we cannot ignore what we spend globally on salaries.
Lonely Planet continues to out-perform the market and build share, but the market has slumped. Even the most optimistic forecasts do not predict any sustained recovery until 2010 at the earliest, and even then it is likely to be slow and patchy. The UN World Travel Organisation forecasts that total outbound travel will fall 2% in 2009, but in our core markets they predict a fall by as much as 10% from the US, 5% from the UK and 2% from Australia. It has become clear that this economic situation is unprecedented, it will not just be a blip and we need to adjust our costs so we can manage through these tough times.
Contrary to some media speculation, the actions we have taken today have not been initiated by BBCW. Irrespective of whether BBCW had invested in us or not we would have needed to respond to the sharp downturn in the market. Our key objective is to get the right size and structure for Lonely Planet in the light of changed circumstances.