Airbnb Inc. said it is slashing 1,900 jobs, or a quarter of its workforce, and cutting investments in noncore operations, as the home-sharing giant predicted the coronavirus pandemic would change its business even after more people start traveling again.
Co-founder and Chief Executive Brian Chesky told employees about the cuts in a memo Tuesday, adding that the company’s revenue forecast for this year is “less than half” of last year’s level. “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Mr. Chesky told employees in a memo Tuesday. “Airbnb’s business has been hit hard.”
U.S. employees laid off will receive 14 weeks of base pay plus an additional week for every year they worked at Airbnb, Chesky said. Airbnb will also provide 12 months of healthcare for laid off U.S. employees, Chesky said. May 11 will be the last work day for impacted Airbnb employees in the U.S. and Canada, Chesky said.
“I have a deep feeling of love for all of you,” Chesky said. “Our mission is not merely about travel. When we started Airbnb, our original tagline was, ‘Travel like a human.’ The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.”
For Airbnb, these layoffs are the latest obstacle in 2020 as the coronavirus pandemic has devastated the entire travel industry. Last month, Airbnb told its employees that it would institute a hiring freeze, suspend its marketing, cut executives’ salary and that it did not expect to give out bonuses for 2020.
Heading into the year, the San Francisco tech company was eyeing an entry into the public markets. The company had lined up bankers to lead the offering, which would test whether Airbnb could live up to its $31 billion private market valuation from 2017. Instead, the company is raising $2 billion in new debt funding at a valuation of $18 billion. The Wall Street Journal reported in February that Airbnb lost $322 million over the first nine months of last year, after reporting a $200 million profit in 2018, as it ramped up spending.
Todd Horwitz Chief Strategist BubbaTrading.com
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