The novel coronavirus pandemic has led to worldwide travel restrictions and lockdowns, and travel-based industries like airlines and cruise lines have been hit harder than most. As a result, other companies that rely on travelers and tourists for their businesses are facing an empty market. Airbnb, estimating that they will make half as much in 2020 as 2019, has announced that they will be cutting nearly 2,000 employees, roughly a quarter of the company's workforce. This represents one of the largest layoffs to hit Silicon Valley as a result of the pandemic.
The announcement came in an email sent by Airbnb Cofounder and CEO Brian Chesky to Airbnb employees. Chesky has sent seven different emails to the workforce keeping them abreast of changes caused by the pandemic.
"When you've asked me about layoffs, I've said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce," Chesky wrote. "While we know Airbnb's business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy."
The email laid out two specific reasons for the layoffs: the company doesn't know when travel will pick back up, and it doesn't know how that travel will change due to the pandemic when it does return.
Chesky went on to describe what he meant by "a more focused business". Simply put, the company is dropping investments and paring down their business ventures. The company will be "pausing" work on Transportation and Airbnb Studios, as well as reducing investments in Hotels and Lux. The email goes on to clarify that cuts will be across the board, not just in these sectors.
For those who are laid-off, Airbnb lays out severance, equity, and healthcare options. U.S. employees will receive "14 weeks of base pay, plus one additional week for every year at Airbnb". Outside the U.S., employees will still receive 14 weeks of base pay, but increases beyond that vary by country.
The company also says they will be doing away with the "one-year cliff on equity" for anyone hired in the last year. This means that every employee who is laid-off, no matter how long they've been with the company, will now be a shareholder.
Airbnb acknowledges that healthcare is a particularly important issue right now. They have plans to cover 12 months of health insurance for employees in the U.S. through COBRA, a form of healthcare offered by companies to their former employees. In other countries, the length of time this type of coverage can be offered is limited, according to the employee email.
Airbnb also announced they will be launching Alumni Support websites and teams to help those laid-off find new jobs.
The final workday for Airbnb employees on the chopping block in the U.S. and Canada will be May 11. Chesky closed the email with a heartfelt-sounding salutation to those who will be leaving the company.
"Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb...that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us."
The layoffs bring some uncertainty to Airbnb's plans to go public in 2020, but Chesky told NPR he is "doing everything in [his] power" to make it happen.
Airbnb offered a $250 million relief fund for hosts who use the income from rentals to make ends meet, but hosts say it and other efforts made by the company to help hosts aren't enough.
Airbnb is merely one of the hundreds of start-ups that have laid-off a total of more than 30,000 employees so far due to the pandemic, according to NPR.