Airbnb could cut spending on Amazon Web Services due to coronavirus

Airbnb CEO Brian Chesky at The New York Times Dealbook event on November 6, 2019.

Credit: Mike Cohen/ The New York Times

Airbnb CEO Brian Chesky said the company is prepared to cut its budget deeper this year if the coronavirus pandemic continues to weigh on its business. 

In recent months, the company endured a round of layoffs, instituted a hiring freeze and suspended marketing due to the Covid-19 crisis, but there could be room for further cuts to its expenditures on Amazon’s cloud-computing service, Chesky said in an interview on Monday with CNBC’s Deirdre Bosa. 

“There are still opportunities on Amazon Web Services (AWS) and customer service to get more efficient in how we use data, how we handle contacts,” Chesky said. “So we’ll continue to make the business more efficient, but the business is definitely pretty learn at this moment.”

It’s unclear how much Airbnb spends with AWS, but the company will likely disclose the figure when it files to go public. Chesky told CNBC that the pandemic put its plans to go public on hold, and the company will wait for market conditions to improve before moving forward.

“We’re not ruling out going public this year, but we’re not committing,” Chesky said. “We want the world to be ready for Airbnb and that means that travel needs to see a little more to stay in recovery.”

Airbnb was hit particularly hard during the pandemic, as nearly every state in the U.S. was on lockdown and air travel was suspended. 

In May, the company laid off nearly 1,900 employees, or about 25% of the company. Chesky warned at the time that Airbnb’s revenue is forecast to be less than half of what it earned in 2019. Prior to that, Airbnb in March announced a hiring freeze for all roles and paused its marketing.

Since then, domestic travel has started to pick up again and Airbnb has seen a bump in bookings, reviving hopes that the company could still pursue a 2020 IPO. 

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