Airbnb to cut 25% of its global workforce amid Covid-19 pandemic
Airbnb co-founder CEO Brian Chesky announced that the company will cut 25 percent of its global workforce. Chesky broke the news to his staff in a letter, informing them that out of 7 500 Airbnb employees, nearly 1 900 teammates will lose their jobs.
In a letter he sent to staff, Chesky wrote: “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. For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb.”
Chesky said the company had been hit hard by the Covid-19 pandemic with revenue this year forecasted to be less than half of what the company made in 2019.
“While these actions were necessary, it became clear that we would have to go further when we faced two hard truths: We don’t know exactly when travel will return and when travel does return, it will look different,” he informed staff.
“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy.
Out of our 7 500 Airbnb employees, nearly 1 900 teammates will have to leave Airbnb, comprising around 25 percent of the company. Since they cannot afford to do everything that they used to, these cuts had to be mapped to a more focused business, he added.
Chesky said Airbnb will reduce investment in activities that do not directly support the core of the host community, and will be pausing efforts in Transportation and Airbnb Studios, as well as scale back our investments in Hotels and Lux.
He did reiterate that many teams will be reduced. Chesky shared how the company decided to reduce its global staff: "Our process started with creating a more focused business strategy built on a sustainable cost model. We assessed how each team mapped to our new strategy, and we determined the size and shape of each team going forward.
"We then did a comprehensive review of every team member and made decisions based on critical skills, and how well those skills matched our future business needs.
"The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone compassionately and thoughtfully," he said. Chesky said employees in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb.
Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices. The company will also cover 12 months of health insurance through COBRA in the US and cover health insurance costs through the end of 2020 for staff in other countries. The staff will also receive four months of mental health support.