Covid-19 forces Airbnb to cut 1,900 jobs

The San Francisco tech company informed staff by email on Tuesday saying it now expects revenue for 2020 to be less than half of last year’s level.

Online booking platform Airbnb will lay off 1,900 employees, or about 25 per cent of its workforce, as it faces “hard truths” including uncertainty over when global travel will resume amid the coronavirus pandemic.

In an email sent out to all employees, CEO Brian Chesky said the company’s 2020 revenue is likely to be less than half of what it booked last year.

“Airbnb’s business has been hit hard”

“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 said in the memo. “Airbnb’s business has been hit hard.”

For Airbnb, these layoffs are the latest obstacle in 2020 as the coronavirus pandemic has devastated the entire travel industry. Last month, the company told its employees that it would institute a hiring freeze, suspend its marketing, cut executives’ salary and that it did not expect to give out bonuses for this year.

The job cuts will be spread about the company’s global operations, with a goal of tuning a more focused business strategy that returns to Airbnb “roots” of being a platform for sharing homes and local experiences.

Airbnb currently employs about 500 staff at its Dublin offices in Ringsend, and it remains unclear as to what impact this latest news will have on the company’s Irish operation.

Dark times to come

It is believed that more than 65 per cent of travellers around the world will reduce their travel plans in the next 12 months, with more than half of business trips booked already cancelled for the rest of 2020.

The number of international travellers could shrink from 1.4 billion to fewer than 800 thousand people, which would be the lowest international travel has fallen since 2015.

“People will want options that are closer to home, safer and more affordable”

The World Travel and Tourism Council, which represents the global private sector of travel and tourism, predicts up to 50 million jobs in the global travel industry could be lost.

Despite taking steps such as raising $2 billion in capital and cutting costs, Chesky said the company needed to take additional steps because of the uncertainty of when global travel will resume. He added that it’s likely travel will “look different” when consumers once again start booking holidays.

“People will want options that are closer to home, safer and more affordable,” he wrote. “This means that we will need to reduce our investment in activities that do not directly support the core of our host community.

“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Mr 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,” he added.

Heading into 2020, the San Francisco tech company was eyeing an entry into the public markets, however, it looks unlikely that this will happen anytime soon.  

By Stephen Larkin

Published: 6 May, 2020