Airbnb is the latest travel and tourism casualty in the Covid-19-led business crisis, with 1,900 staff out of a global total of 7,500 being laid off.
The decision was revealed on May 5 in an open letter by co-founder and CEO Brian Chesky, published on the Airbnb Newsroom website.
In the letter, Chesky acknowledged that decisions on layoffs were never “off the table” and the redundancy measure had to be taken as “Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019”.
He wrote: “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill.”
Despite raising US$2 billion in capital and dramatically cutting costs across the company, Chesky said two “hard truths” – uncertainty around when travel will return and how travel will be when it does return – had made it necessary for the layoffs.
“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,” he explained.
Along with the layoffs, Airbnb will reduce its investment in activities that do not directly support the core of its host community. As such, operations on Transportation and Airbnb Studios will be suspended while investments in Hotels and Lux will be scaled back.
The company has conducted “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,” he wrote, adding that efforts were made to “take care of those that are leaving”.
Affected staff in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb. Tenure will be rounded to the nearest year. Outside the US, afffected employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices.
Airbnb is also dropping the one-year cliff on equity for all staff hired in the past year so that everyone departing is a shareholder. Additionally, all departing staff is eligible for the May 25 vesting date.
The company will continue to cover affected staff’s health insurance – 12 months in the US and through the end of 2020 for staff elsewhere. Four months of mental health support through KonTerra will also be provided.
To help departing staff with new job opportunities, Airbnb will be launching a public-facing job website; creating an Alumni Placement Team with recruiters providing support to departing employees in job searches; providing four months of career services through RiseSmart, a company that specialises in career transition and job placement services; encouraging all remaining employees to opt-in to a programme to assist departing teammates find their next role; and allowing everyone leaving to keep their Apple laptops so that they can use it to find new work.
Chesky explained that with employees across 24 countries that have with their own laws and practices around employment, information around the layoff would not be immediately available.
However, he wrote that the final working day for departing employees based in the US and Canada would be May 11.