Airbnb to cut a quarter of its workforce

George Sell George Sell Uploaded 06 May 2020

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US: Airbnb is laying off nearly 1,900 of its 7,500 employees as a result of the effects of the COVID-19 crisis.

In a letter to employees, Airbnb CEO and co-founder Brian Chesky said: "We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill." .

He said that Airbnb's revenue this year is expected to be less than half of what the company earned in 2019.

"Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer and more affordable. But people will also yearn for something that feels like it's been taken away from them - human connection. When we started Airbnb it was about belonging and connection. This crisis has sharpened our focus to get back back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences. This means we will need to reduce our investments in activities that do not directly support the core of our host community," said Chesky.

This means the company will suspend its transportation department and Airbnb Studios; while scaling back investments in its Hotels and Lux categories.

Chesky also indicated that further cuts may be forthcoming, alluding to “two hard truths” - that no one knows when travel will return or what travel will look like.

In the US, Airbnb said it will cover 12 months of health insurance for its employees through COBRA. In all other countries, it will cover health insurance costs through the end of this year.


Editor's Comment

Airbnb's announcement that it is going "back to basics" and narrowing its offer could signal the end of its attempts to rival Expedia and Booking as a one-stop shop for travel. With the focus back squarely on apartments it could well start making overtures to serviced apartment operators in order to attract them to list more inventory on the platform - regulated, reliable and clean branded product is going to be extremely attractive to Airbnb guests as travel begins to rebound. Airbnb's IPO looks a distant prospect as the company regroups.

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