Airbnb To Lay Off 1,900 Employees As Tourism Industry Collapses  

Update (1544ET): As per Bloomberg, here’s part of the email Airbnb CEO Officer Brian Chesky wrote to employees:

“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” the email said. “Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”

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

* * * 

So about that IPO this year? Well, it seems tough times are here for Airbnb Inc., as a new headline has hit the wires on late Tuesday detailing how the company is expected to lay off up to a quarter of its workforce, or about 1,900 employees, two sources told Reuters. 

Employees that are affected by the cuts will receive four months of salary, “accelerated equity vesting, and health insurance for a year,” one source said. 

Another source said the official announcement has yet to be made, as staff members will be told about workforce reductions on Tuesday. 

Reuters notes that the home rental startup suspended all its marketing activities to save $800 million in 2020 as the tourism industry has collapsed because of coronavirus lockdowns. The company has also said the founders will take no pay for six months, while executives will see a 50% reduction in salary. 

We noted last week that the pandemic had crushed overleveraged Airbnb Superhosts as bookings collapse. 

 

Market-research firm AirDNA LLC. said $1.5 billion in bookings have vanished since mid-March. Airbnb gave all hosts a refund, along with Superhosts, a bailout (in Airbnb terms they called it a “grant”). 

So about that IPO? Well, it seems the virus has put it on pause…