Airbnb slashes jobs as travel nosedives
AIRBNB says it is laying off 25 per cent of its workforce as it confronts a steep decline in global travel due to the new coronavirus pandemic.
It’s a serious setback for the 12-year-old home-sharing company, which just a few months ago was valued at $31 billion and planning a hotly anticipated IPO. Airbnb lists about 7 million properties on its website.
In a letter to employees, chief executive Brian Chesky said the San Francisco-based company was letting 1900 of its 7500 workers go and cutting businesses that didn’t directly support home-sharing. Those include its investments in hotels, air transportation and movie production.
“We are collectively living through the most harrowing crisis of our lifetime,” Mr Chesky wrote.
He said Airbnb expected its revenue to drop by more than half this year. The company is privately held so it doesn’t release financial figures. But AirDNA, a company that monitors bookings and rental fees for Airbnb hosts and others, said new US bookings fell 53 per cent between February 3 and April 13.
Mr Chesky said travel would eventually return, but would look different. Airbnb expects travellers will want options that are closer to home and more affordable, for example. The company is scaling back its investments in luxury properties as a result.
“We need to make fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy,” Mr Chesky said.
The move isn’t entirely unexpected. Last month, two private equity firms – Silver Lake and Sixth Street Partners – invested $1 billion in debt and equity in Airbnb.
The deal may have included a commitment to reduce costs.
Airbnb is now letting people who were planning to check in by June 15 to cancel without penalties.