- Airbnb, a well-known travel startup that connects travelers with places to stay, reported this afternoon that it is laying off about a quarter of its employees
Airbnb, a well-known travel startup that connects travelers with places to stay, reported this afternoon that it is laying off about a quarter of its employees. In a report that TechCrunch published, the organization cited sales losses and a need to cut costs.
In the report, written by Airbnb CEO and co-founder Brian Chesky, the company said it would lay off 1,900 employees, or 25.3 percent of its 7,500 workers. The layoffs would have an effect on a range of internal product categories, including Transportation and Airbnb Studios, on-going projects, and their “scale[d]back” Hotels and Lux jobs.
According to Chesky’s missive, Airbnb anticipates that its 2020 revenue will be below 50 percent of the 2019 total; according to estimates, Airbnb saw revenue of about $4.8 billion last year.
Earlier today, Airbnb Co-Founder and CEO Brian Chesky sent the following note to Airbnb employees.
This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news.
When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce.
Airbnb had previously acknowledged that, in view of the COVID-19 pandemic affecting tourism and travel, layoffs were a possibility. In recent weeks, the company has quickly raised resources including two $1 billion tranches of debt, offering extra liquidity as the world came to a standstill, freezing in-place passengers, and cutting global travel spending. Airbnb has been unable to stop a pattern that directly hits its country.
In an attempt to keep its marketplace’s demand and supply sides healthy enough to withstand hibernation, Airbnb has allowed users to cancel those reservations without penalty and has provided its hosts with financial support.
Presumably part of its new capital went to finance those activities, along with providing the company with ample cash to meet 2021 in a fair manner.
Previously, the company had planned a 2020 IPO; many anticipated the already successful and often profitable firm to seek a direct listing rather than a conventional IPO because it had a fairly strong financial footing going into 2020. While those days are now behind it, in its note the company has confirmed clearly that it expects its business to “recover completely” in time.
Now, the problem is when. Airbnb was a long-touted example of a highly regarded, lavishly backed startup in Silicon Valley that could make money and go public on its own terms. None of those plans had written a pandemic into them.
Separate workers will earn 14 weeks of pay and one more week a year working at the company (about part-time up). The company also removes its one-year equity cliff so that employees who are laid off with fewer than 12 months of service can buy their vested options; Airbnb will also offer 12 months of health insurance through COBRA in the U.S., and health care coverage in the rest of the world by 2020.