US-based hospitality firm Airbnb Inc recently announced that it has decided to lay off about 25% of its workforce, nearly 1,900 employees due to the impact of coronavirus pandemic on travel industry.
Announcing the decision, company Founder Brian Chesky in a memo said that the company’s business has been hit hard as the pandemic has brought travel to a standstill. He also said that the company’s this year’s forecasted revenue is less than half of what the company earned in 2019.
The layoffs will impact a number of internal product groups, including Transportation and Airbnb Studios. The company has also decided to pause efforts in Transportation and Airbnb Studios, and scale back investments in Hotels and Lux.
Airbnb had been taking various measures to sustain its business since the beginning of the new year. With millions of tourists canceling plans for vacations, work trips, and family visits, Airbnb earlier this year said it was allocating $250 million to help offset losses incurred by hosts.
Later in the month of March, the company suspended its marketing activities to save $800million in 2020 and informed workers that its founders will take no salary for the next six months while top executives would take a 50% cut.
The company had long ago notified its employees that layoffs are not inevitable.
Recently in April, the company had raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb. The company is looking to raise its cash reserve to $4 billion. The fund would be used to attract more hosts or homeowners who list their properties for rent on its platform, Airbnb had said.
The company also said that the laid off employees in the United States will get 14 weeks of base pay plus one additional week for every year at Airbnb. Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices.
The company also offered equity benefits to the employees. We are dropping the one-year cliff on equity for everyone we’ve hired in the past year so that everyone departing, regardless of how long they have been here, is a shareholder. Additionally, everyone leaving is eligible for the May 25 vesting date.“
The company has also assured that it will offer healthcare benefits to all its stranded employees during the ongoing health crisis.
“In the US, we will cover 12 months of health insurance through COBRA. In all other countries, we will cover health insurance costs through the end of 2020. This is because we’re either legally unable to continue coverage, or our current plans will not allow for an extension. We will also provide four months of mental health support through KonTerra,” Brian said in the memo.
The founder also announced job support to these employees. In the memo, Brian mentioned a list of assistance offered to these laid off employees.
Our goal is to connect our teammates leaving Airbnb with new job opportunities. Here are five ways we can help:
- Alumni Talent Directory — We will be launching a public-facing website to help teammates leaving find new jobs. Departing employees can opt-in to have profiles, resumes, and work samples accessible to potential employers.
- Alumni Placement Team — For the remainder of 2020, a significant portion of Airbnb Recruiting will become an Alumni Placement Team. Recruiters that are staying with Airbnb will provide support to departing employees to help them find their next job.
- RiseSmart — We are offering four months of career services through RiseSmart, a company that specializes in career transition and job placement services.
- Employee Offered Alumni Support — We are encouraging all remaining employees to opt-in to a program to assist departing teammates find their next role.
- Laptops — A computer is an important tool to find new work, so we are allowing everyone leaving to keep their Apple laptops.
Brian also asked people outside the organization to help these employees with their job hunt. In a tweet, he said, “We have great people leaving Airbnb, and I think other companies will love them as much as I do. If you are hiring, reach out to me at brian.chesky@airbnb.com and our team will connect you.”
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