The coronavirus pandemic has landed a crushing blow on Airbnb. In a memo to employees, co-founder and CEO Brian Chesky revealed the company is parting ways with a quarter of its workforce — or roughly 1,900 employees.
“Today, I must confirm that we are reducing the size of the Airbnb workforce,” Chesky wrote. “Out of our 7,500 Airbnb employees, nearly 1,900 teammates will have to leave Airbnb, comprising around 25% of our company. Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business.”
Chesky explained the decision has to do with a sharp decline in revenue, which is forecasted to be less than half of what the company earned in 2019.
Rumors about possible layoffs at Aribnb have been circulating for a couple of weeks now. Protocol recently reported the company had laid off all of its contractors, and postponed summer internships in an effort to cut costs. The announcement merely confirms the speculation.
Chesky noted he believes Airbnb will eventually bounce back, but until then the company is shifting efforts to “more focused business.”
“This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences,” the CEO wrote. As part of this move, the company is halting its efforts in transportation and Airbnb Studios. It’s also halting its investments in hotels, which will be scaled back.
Laid off employees will receive 14 weeks of pay, plus one additional week for every year at the company. The company is also dropping its one-year cliff on equity so employers who’ve been with the company for less than 12 months can take advantage of vested shares.
Airbnb will also cover healthcare costs for the next 12 months for employees in the US, and throughout 2020 for those abroad. Employees will also be allowed to keep their MacBooks, because a “computer is an important tool to find new work.”
The company recently secured $2 billion in funding in the form of two separate tranches of credit to shore up its coronavirus struggles. As TechCrunch notes, the funding will presumably help the company provide financial relief to hosts who lost business as a result of the pandemic. Still, many hosts have complained they’ve been left out in the cold.
The company was also slated to go public in 2020. Needless to say, these plans are all in the past now.