The COVID-19 pandemic has effectively gutted Airbnb’s core business, and the company is taking drastic action to stay afloat while people aren’t travelling. The company has confirmed to TechCrunch that it’s laying off 1,900 employees, or just over 25 percent of its workforce, to cut costs during the crisis. It didn’t outline which countries would be most affected, but a memo from CEO Brian Chesky said the layoffs would affect Transportation, Airbnb Studios, Hotels and Lux.
The cuts would be “mapped to a more focused business,” Chesky said in the memo.
Departing staff will get 14 weeks of pay, plus another week for every year they’ve worked at Airbnb, and will get a year’s worth of health insurance in the US. International workers will get health coverage through the end of 2020. Employees who’ve worked for less than a year can buy their vested share options.
Airbnb has a degree of cushioning. It scrambled to raise capital once the pandemic hit, including $2 billion in debt. All the same, it’s easy to see why the company would cut jobs to such a severe degree. While lockdowns are beginning to lift, it could be a long time until travel resumes in earnest, let alone until enough travellers are comfortable that Airbnb sees pre-pandemic booking levels. The layoffs might help Airbnb survive until that point without having to ask for more money.
Source: engadget.com