Airbnb Inc. is cutting 25 per cent of its workforce as the coronavirus pandemic continues to pummel the travel sector.
About 1,900 Airbnb employees across the world will be affected, Chief Executive Officer Brian Chesky wrote in an email to staff Tuesday. Those employees’ last day will be Monday, May 11, the email 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,” Chesky wrote. “Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”
The San Francisco-based startup, which was poised to be the blockbuster stock listing of the year, has raised US$2 billion in capital and dramatically cut costs in a bid to weather the slump.
“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Chesky wrote. “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.” As a result, Airbnb will be pausing its efforts in transportation and scaling back its investments in hotels and luxury travel, he said.
In an interview with Bloomberg in March, Chesky said the past few months have weighed on him. “I’m not sure if there’s a more difficult thing that a CEO of a travel company could ever do than go through this,” he said. “You feel like you were T-boned, or like a torpedo has just hit the ship.”
Prior to the pandemic, Airbnb’s expenses had already been growing. In 2019, expenses exceeded US$5 billion as the company sank money into new offerings aimed at increasing revenue before its highly anticipated initial public offering. The coronavirus outbreak has put Airbnb’s market debut in jeopardy.
In the post-pandemic world, Chesky is betting that travelers will want options that are closer to home, safer and more affordable. “When we started Airbnb, it was about belonging and connection,” he wrote in the email. “This crisis has sharpened our focus to get back to our roots, back to the basics.”