Airbnb is laying off a quarter of its staff which represents about 1,900 employees out of 7500. The layoff is due to reduced revenue losses recorded since the onset of the Coronavirus pandemic. The company has projected this year’s revenue to be half of what it collected in 2019.
Brian Chesky, the company’s founder and CEO, in an email to employees confirmed that Airbnb’s revenue in 2020 was projected to be just half of what it collected in 2019, which according to Reuters is about $4.8 billion. As a result, he said Airbnb would streamline its business. Scaling back it’s spending in growth areas such as its pushes into luxury homes and traditional hotels.
“To those leaving Airbnb, I am truly sorry,” Chesky wrote to employees. “Please know this is not your fault.” Further, he confirmed that all laid-off employees, even those there for less than a year who wouldn’t ordinarily qualify for vested shares, would receive their equity.
Airbnb has grown tremendously in the last few years including expanding beyond homes. Over the last few weeks, the company secured $2 billion in debt. To try to survive the coronavirus pandemic, which has drastically cut back on people’s ability and willingness to travel. Airbnb declined to comment on how this would affect its expected 2020 IPO.
the COVID-19 pandemic has brought about a tough economy especially for startups globally. Uber, is also reportedly in the process of mulling layoffs that could account for about 20 per cent of its staff. Lyft has as well cut about 17 per cent of its staff. A move to accommodate the tough economic times during the pandemic.
Also, In response to travel bans and a surge of requests for cancellations. The platform said earlier this week that it was allocating $250 million to help offset losses incurred by hosts.