Airbnb, hit hard by the global
Chesky announced the cuts at a staff meeting at noon then confirmed them in an internal letter he subsequently sent to workers. The company is expecting the pandemic to reshape the travel industry and its business, Chesky said in the letter. The cuts are meant to help refocus Airbnb's business on what it sees as its primary opportunities after the crisis, he said.
"Today, I must confirm that we are reducing the size of the Airbnb workforce," Chesky said in the letter. "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."AdvertisementThe cuts come despite the fact that Airbnb has raised $2 billion in the last month through debt financing. The company is forecasting that its revenue will be less than half the $4.8 billion it pulled in last year.
The company plans to notify affected workers in the US and Canada later on Tuesday, Chesky said. Workers in other countries will be notified according to local laws and standards, he said. The effective date of the
The company is planning on returning its focus to home sharing — people who offer accommodations in the rooms, apartments, and houses that they own or manage. As a result, Chesky said, it's planning on pushing the pause button on its efforts in transportation and in Airbnb Studios, its effort to produce streaming travel videos. The company also is planning to cut back on investments in offering hotel rooms and in Lux, it's luxury accommodations effort, he said.
Airbnb plans to pay laid off US workers 14 weeks of base pay plus an additional week for each year or partial year of service to the company. Non-US employees will get at least 14 weeks of pay.
The company is also planning on providing 12 months worth of health care coverage to US workers. Outside the US, workers will have their health insurance costs paid through the end of this year.AdvertisementThe mass job cuts are only the latest effort by Airbnb to slash expenses in response to the crisis. Last month, the company laid off most of its contractors and postponed its summer internships. In late March, it slowed its hiring and froze its marketing spending.
Last month, right after Airbnb raised its first $1 billion in debt financing, Business Insider estimated that at its burn rate from 2019, it could still run out of cash in less than a year.
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