A dark day for staff and the tech industry at large, Airbnb has revealed the need to cut 1,900 employees, or roughly 25% of its staff due to.
On Tuesday, Airbnb co-founder and CEO Brian Chesky published a letter addressing employees, saying he was "truly sorry" to have to make such drastic changes to the workforce.
The coronavirus outbreak has rocked the global economy and attempts to slow down the spread of the respiratory illness and stop health services from being overwhelmed has included lockdowns and travel bans outside of non-essential trips.
As a result, Airbnb -- an alternative to traditional hotels in which users can book rooms or rent properties on a short-term basis as they travel -- has suffered from cancellations and a steep decline in demand.
Chesky says that Airbnb's revenue is expected to be less than half of what the company earned last year, reported to be over $4.8 billion. The firm's plans for an Initial Public Offering (IPO) may also have been put on hold as bookings have plunged by 40% due to the pandemic.
"We don't know exactly when travel will return. When travel does return, it will look different," the executive added. "While we know Airbnb's business will fully recover, the changes it will undergo are not temporary or short-lived."
Airbnb has attempted to avoid impacting its workforce by raising $2 billion in capital and by launching cost-cutting exercises, but these efforts have not been enough to prevent the need to lay off staff.
Chesky says that 1,900 out of 7,500 employees will have to leave the company -- roughly a quarter of the entire roster. Teams across the whole company will be impacted, with reductions focused on a transition to a more "focused" future business strategy.
Staff members leaving Airbnb that are based in the United States can expect 14 weeks of severance pay and an additional week for every year they have been with the company. In the US, 12 months of health insurance will be covered via COBRA. Four months of mental health support will be provided through KonTerra.
Severance deals will vary depending on local laws outside of the US.
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"I am truly sorry," the CEO says. "Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb, that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us."
The CEO says that in the future, Airbnb will be going back to its home and office-booking roots, and therefore, investments in projects outside of this scope -- including transport, Airbnb Studios, and the Luxe boutique service -- will be suspended.