The $200 million in costs that Marriott International expects to cut as a result of the acquisition of Starwood Hotels and Resorts will come in large part from trimming overhead and reducing headcount, confirmed Marriott CEO Arne Sorenson. Sorenson, speaking on the Fox News program "Sunday Morning Futures with Maria Bartiromo," specified that this would not be happening at the individual hotel property level.
"At the hotels, I don't think there will be significant job impacts - maybe zero job impacts across the world," Sorenson said. "The closer you get to the executive suite, and [Starwood's] headquarters, for example - or in the two companies' headquarters - the more you see a head-to-head overlap. We don't need two CEOs, we don't need two general counsels, we don't need two boards of directors. And so I think we'll find the biggest cost savings disproportionately at the higher end of the overhead structure."
Changes already are being made in Starwood's executive offices. Starwood's interim CEO, Adam Aron, will step down at the end of the year to become president and CEO of AMC Entertainment Holdings, and will resign his seat on the board of directors at that time, as well. As of Dec. 31, Starwood's executive vice president and CFO, Thomas Mangas, will assume the role of CEO. Marriott's acquisition of Starwood is expected to be finalized in mid-2016.
Sorenson indicated the strength of the merger will come from the plethora of brands the new Marriott will offer. "We will be very strong in the luxury and upper upscale space," he said. "So with our Bulgari and Ritz-Carlton brands, we'll be adding St. Regis and Luxury Collection. We'll have W in addition. We'll have some brands that are exciting and appeal to lots and lots of travelers."
View Sorenson's full interview here.