Wyndham Laying Off 4,000 in Restructuring

PARSIPPANY, NJ-In a conference call yesterday morning, Wyndham Worldwide Corp. said it now expects to reduce gross Vacation Ownership Interest sales in 2009 to approximately $1.2 billion from expected gross VOI sales of around $2 billion in 2008 by eliminating sales offices and marketing programs. The job losses, which will amount to around 4,000, represent about 12.5% of the company’s 32,000 global employees. In addition to eliminating the need to access the ABS market, the realignment will reduce costs and capital needs and enhance cash flow.

“With the credit markets showing no signs of improvement, we are effectively eliminating our need to access the securitization markets to support an otherwise well-performing vacation ownership business,” said Wyndham Worldwide chairman and CEO Stephen P. Holmes in a statement made Monday. “These proactive steps will ensure maximum flexibility across all our businesses irrespective of conditions within the asset-backed securities market. If the markets are available, we will certainly utilize this effective form of financing, but we are assuming that the markets will be unattractive for the foreseeable future.”

The company expects to take a charge of approximately $50 million to $60 million in the fourth quarter of 2008 and $10 million to $15 million in the first quarter of 2009 related to these initiatives. These charges are incremental to previously revealed company-wide restructuring charges of $25 million to $30 million in the fourth quarter of 2008 and $5 million to $10 million in the first quarter of 2009.