Airbnb cuts 25% of its workforce in latest round of coronavirus-related layoffs affecting the tech industry

The economic impact of coronavirus pandemic is now beginning to be felt across the technology sector. Yesterday, we wrote about Uber after the beleaguered ride hailing company announced it was laying off off 3,700 employees, about 14% of its entire workforce.

Uber is not the only tech company reeling from COVID-19. The home-sharing platform Airbnb, which was widely expected to go public this year, becomes the latest casualty of the ongoing coronavirus-related layoffs. In a memo sent to company’s employees on Tuesday, co-founder and CEO Brian Chesky told employees that the company is letting go of a quarter of its workforce.

This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news.

When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce. 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. I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next.

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

In response, Chesky said the company had raised $2 billion in capital and slashed costs across the company, but still needed to make dramatic layoffs amounting to about a quarter of its 7,500 employees.

“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,” Chesky wrote. “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 a result, Chesky went on to say the company would reduce its investment in activities that don’t directly support the core of its host community, such as Transportation and Airbnb Studios, as well as scaling back on investments in Hotel and Lux.  To help the affected employees, Airbnb will provide 14 weeks of severance plus one additional week for every year at the company. And U.S. employees will have 12 months of health insurance covered.