Marriott International Inc. will cut “hundreds” of jobs in its corporate information technology department in Bethesda, a company executive confirmed late Friday.
The Bethesda hotel giant announced the cuts to Marriott employees this week in presentations by senior IT management on the company's plans to restructure its information technology operations.
Layoff notices will start as early as next month, with terminations expected to take several months to complete. Employees will be given 60 days' notice and will be eligible to apply for any jobs remaining in the new Marriott IT organization.
The company (NYSE: MAR) said it will outsource the jobs to “companies whose core competency is IT services.” It said it began the process of restructuring the department about three years ago when it created global operating units.
“We have been very open and transparent in this process,” Marriott said in a statement issued to the Washington Business Journal. “In the Information Resources area specifically, we will be contracting with companies whose core competency is IT services, which will create efficiencies for the company, our owners and franchisees.”
The statement said the company has held five "town-hall" style meetings with employees in the last year.
“This week, at another town hall, we announced there would be reductions in Headquarters-based IT jobs. There have been no formal notices given, so it would be unfair to share any numbers with the media now. As our plans develop, we will share them first with associates and then with the media.”
The company said it was providing resources to affected employees to support their transitions.
The hotel chain has consistently made Computerworld's "Best Places to Work in IT" ranking, coming in 22nd in the 2012 list. The magazine listed the company's total information technology head count at 1,286.
The cuts underscore a challenge that every enterprise with a substantial IT department faces: whether to outsource and, if so, how much. That question is increasingly pressing as more applications and data move off site into the cloud.
Marriott is the sixth-largest private sector employer in the Washington region, according to Washington Business Journal research. It has 13,700 employees in the region.
Marriott's stock closed at $40.35 a share in Friday afternoon trading, not far from its 52-week high of $41.84 in September. Its 52-week low is $33.93.
In February, the company reported increases in revenue and profits for the fourth quarter. Quarterly revenue climbed to $3.76 billion, up 10 percent from a year ago. Revenue per available room, or RevPAR, rose nearly 6 percent in 2012 for the company's North American hotels.
Net income for the quarter increased from $159 million, or 46 cents per diluted share, to $181 million, or 56 cents per diluted share.
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