(TAN): Global home-sharing platform Airbnb is laying off 1,900 employees, or about a quarter of its workforce, amid uncertainty over global travel demand caused by COVID-19.
According to reports, this constitutes one of the largest downsizings to strike Silicon Valley as an effect of the pandemic.
Chief Executive Officer and Co-Founder of Airbnb, Brian Chesky announced the decision, adding he had “very sad news” to share. He said the company took the call after its 2020 revenue was predicted to be less than half of what it was in 2019, as a result of the crushing blow the virus outbreak dealt to the global tourism industry.
“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019,” Chesky said.
Although Airbnb raised USD 2 billion in capital and cut costs to tackle the situation, the company needed to take further measures because unpredictable as to when travel will resume, and even when it does it will possibly “look different” – Chesky said he expects people to begin travelling closer to home before they venture to distant lands.
“Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable,” he said.
This would mean the business will lessen its “investment in activities that do not directly support the core” of its host community. Airbnb will halt projects associated with transportation, hotels and luxury stays, Chesky said.
“Traveling is not a trend that we rode. We didn’t invent it. There is a fundamental human need to explore. I think travel will be eventually much larger after COVID than before. It may take years,” Chesky was quoted by NPR as saying.
Departure terms were generous – Chesky said employees in the United States will be given 14 weeks of base pay along with one extra week for every year at the company. Airbnb employees based in other countries will receive a minimum of 14 weeks of salary together with tenure increases as per the practices in that country. Employees who are fired in the United States will be given a year of health insurance coverage through COBRA.
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“I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, “Travel like a human.” The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love,” Chesky said.
Chesky said “teams across all of Airbnb will be impacted” as the company lets go of staff that it “love and value”.
“Please know this is not your fault,” he said to the departing employees.
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