Lyric to close units and lay off 20 per cent of staff

George Sell George Sell Uploaded 06 March 2020

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US: San Francisco-based hospitality start-up Lyric, which numbers Airbnb among its investors, is to lay off 25 of its 120 staff and close up to 200 units.

The company, which took over the management of the Q&A Aparthotel in Manhattan from Furnished Quarters last year, is undergoing a “downsizing and restructuring” process, according to a report in New York's The Real Deal.

Founded in 2014, Lyric operated nearly 600 units in 14 cities around the country at the end of last year.

The cut backs comes less than a year after it raised $160 million in a Series B round from Airbnb, RXR Realty and Tishman Speyer.

In a statement, Lyric said in order to achieve a sustainable business model, it has started focusing on “larger projects with increased density” in some of its best-performing cities.

“That means not only restructuring our operations but the teams that support each function, all with aim of creating a sustainable growth model and even better guest experience,” the statement said.

According to the report, among those laid off were two vice presidents of real estate, an interior designer, brand manager and several people in finance.

“I think it was not an easy decision; I think it was one they had to make,” said a former executive, who spoke to TRD on the condition of anonymity citing a separation agreement with Lyric. “There’s not much viability if they kept the amount of people they had.”

At an all-hands meeting in January, sources said, Lyric disclosed to employees that it missed its 2019 revenue target and would close some locations in order to focus on better-performing markets.

The report claimed the company was planning to close 193 units in Philadelphia, Houston, Dallas, Pittsburgh, Orlando, Minneapolis, Washington, D.C., and Chicago. It planned to keep 418 units in New York City, San Diego, Philadelphia, New Orleans, Miami, Charlotte, Austin and D.C.

To date, the company has raised $180 million from investors including RXR Realty and Tishman Speyer, investor Adam Bain, Fifth Wall Ventures, Barry Sternlicht, NEA and Tusk Ventures. The $160 million round intended to allow the firm to double in size from 500 units to 1,000 units nationwide.

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