H.I.S. Co. plans to close around 80 to 90 outlets in Japan, or about a third of its locations, within a year as part of cost-cutting efforts after the major travel agency was left reeling due to the effects of the coronavirus pandemic.
The company reported Wednesday a group net loss of ¥3.45 billion ($32.19 million) for the six months through April, falling into the red for the first time on an interim basis since its listing in 2002.
It cited a host of overseas package tour cancellations as the main reason for the dismal results, and did not give an earnings forecast for the year through October.
Speaking during an online news conference, H.I.S. Chairman Hideo Sawada said it is difficult to see demand for overseas trips recovering before next year due to the impact of the virus.
The company aims to slash spending by about ¥20 billion this year by cutting personnel and advertising costs, among other measures. It has also decided not to pay summer bonuses to its workers.
Overseas package tours were hit hard from March as many countries imposed entry bans on tourists and the Japanese government asked people to stay home to avoid infections.
The number of Japanese departing the country in April plunged 99.8 percent from a year earlier to 3,915, according to the Japan National Tourism Organization.
The embattled travel agency has also stopped hiring graduating students who will join the workforce in spring 2021.
The decision came after H.I.S. suspended its recruiting activities in late March due to the virus outbreak. Students who had applied for positions at the company were told about the recruitment cancellation through a website for job-seekers.
H.I.S. initially planned to hire about 600 new graduates to join the company in spring 2021. The travel agency will not cancel informal job offers it has already made.
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