A round of Airbnb layoffs that was announced on Tuesday reveals that the company will cut 1,900 jobs from its global workforce, a number that represents around 25% of the company’s global employees. Citing the coronavirus crisis as the reason for a decrease in travel in recent months, the company’s struggles amplify the current unemployment situation, demonstrating that it may take longer to bounce back from the crisis than experts originally thought.
In a note written by the company’s CEO, Brian Chesky, he revealed that the decision to go through with mass layoffs came after a consistent decline in revenue. Airbnb claims its 2020 revenue will see only 50% of what it brought in for all of 2019.
The prediction is based on the assumption that people will not resume travel immediately once the coronavirus crisis begins to die down. Many assume that the travel industry will see a greater impact, as it’s revenue has been halted since late February in many parts of the world.
Airbnb’s global presence has been threatened by the coronavirus, but for how long?
Airbnb, a global company with listings on almost every continent (a search for “Antarctica” on the company’s website garners results in places like Patagonia and South Africa) has seen a steep decline in revenue since the crisis began.
The company first offered many of its listings to frontline workers that don’t want to put their families at risk of contracting the virus to encourage social distancing. Hosts that wanted to donate their properties were able to connect with frontline workers searching for a place to stay through the website. Without a steady stream of travelers renting properties around the globe, though, the company quickly lost much of its revenue.
“For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb,” Chesky wrote in a heartfelt open letter published to the company’s website on Tuesday. The company did not elaborate on which of its 31 global office locations would see the most layoffs. But did reveal that the decision will see the company scale back and focus on its original business model—shared spaces.
Airbnb to scale back its expansion into other business models.
That being said, the sectors of the company most at-risk for facing mass rounds of layoffs are in its newer services, like transportation, experiences and luxury rentals. Once travel does come back, the company anticipates that it will look different from the pre-Covid life we had before.
“Travel in this new world will look different, and we need to evolve Airbnb accordingly,” Chesky writes. “People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences.
As more and more companies grapple with the reality that the uncertainty surrounding the threat of Covid-19 on both public health and the economy, the idea that any company is going to expand its businesses into new realms is unlikely.
Politicians around the country might be rushing to encourage consumers to go back to their old lives, but changes from companies like Airbnb signal a new shift in the consumer landscape. Likely, people will inch their way back into travel until the threat of Covid-19 can be put behind us once and for all, but for now companies are operating under the expectation that it won’t be in our immediate future.