The travel industry is one of the hardest hit in the midst of this global crisis, and we’re seeing travel giants struggle to keep their businesses afloat. Airbnb recently announced that it would by letting go of 25% of its global workforce, citing declined revenues and the need to cut costs.
In a note to his employees, CEO Brian Chesky wrote:
We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019. In response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb.
While these actions were necessary, it became clear that we would have to go further when we faced two hard truths:
1. We don’t know exactly when travel will return.
2. When travel does return, it will look different.
While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. 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.
This move is a sobering reminder of just how badly affected the travel industry is. Last year, Airbnb made around $4.8 billion in revenue. This year, they’re expecting to get less than half of that. According to the International Air Transport Association, revenue for airlines is expected to decrease by $314 billion — that’s a 55% drop from last year’s figures.
Airbnb’s laid-off employees will still receive 14 weeks of pay, plus one more week for each year served at the company. The company will also be providing health insurance for a year in the US, and health care coverage until the end of 2020 for the rest of the world.
What do you think of the Airbnb layoffs?