Airbnb CEO Brian Chesky announced yesterday that the home-sharing company would lay off 25 percent of its employees, or 1,900 workers, in response to a dramatic decline in revenue.
In a company-wide email to employees, Chesky said Airbnb’s revenue for this year would likely be about half of what it earned in 2019. The company has raised $2 billion in capital — including its first $1 billion in debt financing — and cut costs in response to the coronavirus-induced decline. But Chesky said he had to eliminate or reduce investment in businesses that “do not support the core of our host community,” such as transportation, streaming video content and hotels.
“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Chesky wrote in the email, which he later posted to the company’s website. “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.”
The company will lay off 1,900 of its 7,500 employees across the world. Their last day will be May 11. Airbnb will offer laid-off workers 14 weeks of base pay plus one additional week for each year or partial year worked at the company. The firm will also cover 12 months of health insurance through COBRA. Outside of the U.S., departing employees will get at least 14 weeks of base pay and health care costs covered through the end of 2020. Workers will also get to keep their Apple laptops.
Airbnb is also launching a public-facing directory of its laid-off employees, offering four months of career services and converting part of its recruiting team to a placement team that will help departing workers find their next job.