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Airbnb CEO Brian Chesky at The New York Times Dealbook event on November 6, 2019.
Credit: Mike Cohen / The New York Times
Airbnb plans to lay off nearly 1,900 employees, or about 25% of the company, a person familiar with the plans confirmed to CNBC.
The layoffs were first reported by The Information, which reported that CEO Brian Chesky would communicate the news to employees in a call that would begin around 3 p.m.
“We are collectively experiencing the most heartbreaking crisis of our lives, and when it began to unfold, the global journey stopped,” Chesky told employees according to a copy of his prepared remarks. “Airbnb’s business has been hit hard, and this year’s revenue is projected to be less than half of what we earned in 2019.”
Before the layoffs, Airbnb had 7,500 employees, Chesky said. Airbnb will halt projects related to hotels, a transportation division and luxury stays, Chesky said.
“Traveling in this new world will look different, and we need to evolve Airbnb accordingly,” he said.
Sacked American employees will receive 14 weeks of base salary plus an additional week for each year they work at Airbnb, Chesky said. Airbnb will also provide 12 months of medical care to laid-off US employees. USA, Chesky said. May 11 will be the last work day for impacted Airbnb employees in the United States and Canada, Chesky said.
“I have a deep feeling of love for all of you,” Chesky said. “Our mission is not simply to travel. When we started Airbnb, our original motto was: ‘Travel like a human’. The human part was always more important than the part of the trip. It is about belonging, and at the center of belonging is love. “
For Airbnb, these layoffs are the last hurdle in 2020, as the coronavirus pandemic has devastated the entire travel industry. Last month Airbnb told its employees it would institute a hiring freeze, suspend marketing, cut executive pay, and did not expect to award bonuses by 2020.
At the beginning of the year, the San Francisco technology company was seeking an entry into the public markets. The company had lined up bankers to lead the offering, which would test whether Airbnb could meet its $ 31 billion private market valuation as of 2017. Instead, the company is raising $ 2 billion in new debt funds. at a valuation of $ 18 billion. The Wall Street Journal reported in February that Airbnb lost $ 322 million in the first nine months of last year, after reporting a profit of $ 200 million in 2018 as spending increased.
