Airbnb is letting go of a quarter of its workforce, co-founder and CEO Brian Chesky told employees in a memo on Tuesday, as the coronavirus pandemic has decimated demand for his company’s services.
The home-sharing platform, which was widely expected to go public this year, becomes the latest sharing economy company to institute or consider instituting significant layoffs. Uber (UBER) - Get Report is reportedly considering laying off 20% of its workers while Lyft (LYFT) - Get Report has already laid off 17% of its employees.
"We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill," Chesky wrote. “Airbnb’s business has been hit hard."
Chesky said that the revenue forecast for the year is less than half of last year’s level, nothing that global travel has come to a halt as a result of the coronavirus pandemic.
In response, Chesky said the company had raised $2 billion in capital and slashed costs across the company, but still needed to make dramatic layoffs amounting to about a quarter of its 7,500 employees.
Chesky noted that the company doesn't know exactly when travel will return and that when it does return, it will look different.
"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," Chesky wrote. "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.
As a result, Chesky said that the company would reduce its investment in activities that don’t directly support the core of its host community, such as Transportation and Airbnb Studios, as well as scaling back on investments in Hotel and Lux.
Employees in the U.S. will receive 14 weeks of severance plus one additional week for every year at Airbnb. And U.S. employees will have 12 months of health insurance covered.