Airbnb is laying off 1,900 employees, or about 25.3 percent of its global workforce, as the COVID-19 pandemic has hit its business hard. In a note to employees, Airbnb CEO and co-founder Brian Chesky said that the company forecast revenues in 2020 to be less than half of what it generated in 2019. Airbnb reportedly saw around $4.8 billion in revenue last year.
Airbnb is a company that relies heavily upon people traveling. With the COVID-19 pandemic restricting people to stay home, its business has come to a complete standstill. In his note, Chesky told staff: "We don't know exactly when travel will return. When travel does return, it will look different."
So in order to cut operational costs, the company is now looking to reduce its investment in activities "that do not directly support the core" of its host community. It is "pausing" its efforts in Transportation and Airbnb Studios. The company will also "scale back" its investments in Hotels and Lux.
Airbnb currently has employees in 24 countries around the world. Headquartered in San Francisco, the company also has a head office in Dublin. It employs about 500 people in its office in Ireland.
The company didn't break down layoffs per country but said teams across all of the internal product groups will be impacted. Teams will be reduced in size based on how well they fit in the company's future business strategy.
Describing coronavirus as "the most harrowing crisis of our lifetime," Chesky said that travel post the pandemic will look different. "We need to evolve Airbnb accordingly," he added.
Airbnb laying off a quarter of its global workforce
In light of the pandemic impacting tourism and travel, the company took steps such as raising $2 billion in capital and "dramatically" cutting costs. However, that didn't prove to be enough, and Airbnb is now laying off a quarter of its global workforce. The lay off will come into effect this Monday, May 11 for employees based in the US and Canada.
Airbnb is offering very generous separation terms though, at least when compared to many other companies. The company will offer separated employees 14 weeks of base pay, plus one more week for every year at Airbnb. It is also dropping its one-year equity cliff for employees hired in the past year.
Additionally, Airbnb will provide up to 12 months of health insurance and four months of mental health support to employees who are losing their jobs. Chesky also promises to assist them in finding their next job.
"We have great people leaving Airbnb, and other companies will be lucky to have them," he wrote.