airbnb downsizes and cuts 25 percent of workforce

on tuesday, may 5, 2020, airbnb co-founder and CEO brian chesky confirmed the company is reducing its workforce by laying off about 25 percent of its staff. the travel and tourism industry is among those hit the hardest amid the ongoing COVID-19 crisis, with thousands of planes grounded, hotels and restaurants abruptly shuttered, and borders closed. airbnb’s business is no exception, whose revenue this year is forecasted to be less than half of that last year. chesky announced the news to the company’s employees through a respectful, transparent note that thoroughly details how he arrived at this decision, what airbnb is doing for those leaving, and what will happen next. image courtesy of airbnb

‘we are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,’ explains brian chesky in the note, who co-founded airbnb together with joe gebbia and nate blecharczyk in 2008. ‘airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019. in response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of airbnb.’ out of 7,500 employees, nearly 1,900 will have to leave the company, while airbnb is developing a more focused business strategy to make sure it will fully recover in the future.

chesky thoroughly outlines the decision process for making reductions in the note, where he explains that each team member was comprehensively reviewed based on critical skills, and how well those skills matched the company’s newly established business strategy, built on a sustainable cost model. ‘to take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way,‘ he says. according to his note, departing employees will receive support in finding their next job through a series of steps, including an alumni talent directory and placement team, as well as four months of career services through RiseSmart, offered by the company.

the new strategy airbnb is adopting focuses on returning ‘back to the basics’, and reducing investment in activities that do not directly support the core of the company’s host community. as such, efforts in transportation and airbnb studios are currently paused, while the company is also scaling back its investments in hotels and lux. ‘travel in this new world will look different, and we need to evolve airbnb accordingly,’ brian chesky says in the note. ‘people will want options that are closer to home, safer, and more affordable. but people will also yearn for something that feels like it’s been taken away from them — human connection. when we started airbnb, it was about belonging and connection. 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.’