The San Francisco startup announced it was going to cut 2,000 jobs or about 25% of its workforce. The job cuts took effect last Monday for workers in the United States and Canada.
The layoffs news comes as a big shocker as the company was a prime candidate for a 2020 public market debut.
Once valued at roughly $31 billion, Airbnb is now facing the wrath of the coronavirus pandemic. The company has not decided to lay off 25 percent of its workers in a bid to sustain amidst the devastation caused by the economic downturn.
“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” CEO Brian 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.”
In an interview with Bloomberg in March, Chesky shared what the past few months have been like for Airbnb: “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 coronavirus pandemic, Airbnb’s money sank into new offerings aimed at increasing revenue sources. The 2020 COVID-19 outbreak has now put the company’s future into great peril.
“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.”
The outbreak caused Airbnb to lay off most of its contractors. The company recently postponed all summer internships and new graduates hires until August 2021. Although, Airbnb will be paying these new hires 10% of their salary even if they turn down the job.
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