Home-rental company Airbnb will cut 1,900 jobs, or a quarter of its workforce, to offset losses sustained due to the coronavirus pandemic, the company’s chief executive said.
"We are reducing the size of the Airbnb workforce ... this is incredibly difficult to confront and it will be even harder for those who have to leave Airbnb," Brian Chesky, who is also the co-founder of the company, said in a memo to employees on Tuesday.
“Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business,” Mr Chesky said. He had indicated last month that layoffs were forthcoming.
With global travel coming to a standstill as a result of the pandemic, Airbnb’s business has been hit hard. The company now expects this year's revenue to be less than half of the $4.8 billion (Dh17.62bn) earned in 2019.
Founded in 2008, the San Francisco-based company does not own any real estate but acts as a broker, getting commission from each booking.
Travel in this new world will “look different and Airbnb needs to evolve” accordingly, Mr Chesky said, adding, “we will need to reduce our investment in activities that do not directly support the core of our host community”.
The company is suspending projects related to transportation, television production and scaling back its investments in luxury properties and hotels.
“These decisions are not a reflection of the work from people on these teams and it does not mean everyone on these teams will be leaving us,” Mr Chesky said. “Many teams will be reduced in size based on how well they map to where Airbnb is headed.”
Last month, Airbnb secured $2bn in debt and equity from private equity firms including Silver Lake, Apollo Global Management and Sixth Street Partners to bolster its finances.
The home-sharing rental giant, which was planning to go public this year, was valued at $31bn in March 2017, after raising more than $1bn in a financing round.
The company says it has more than 7 million listings in over 100,000 cities and 8.2 million guest arrivals in the first seven months of last year.
Employees who lose their jobs are being offered at least 14 weeks of full pay.
In the US, the company will cover 12 months of health insurance, while in all other countries, it will cover health insurance costs through the end of this year, Mr Chesky said.
“To those leaving Airbnb … I am truly sorry. Please know this is not your fault,” he said in closing.
As part of its extenuating policy, Airbnb is offering full refunds in cash or travel credit for cancellations of Covid-19 impacted reservations booked before March 15, for check-ins up to June 15.
The announced cuts hit across the company, but most employees focused on software engineering and product are being spared, according to The Information, a US digital media company. The cuts would save between $400 million and $500m, annually, it added.
Other online travel firms that compete with Airbnb, including Booking Holdings, Expedia and TripAdvisor have already, laid off staff.
