Airbnb CEO Brian Chesky at The New York Times Dealbook event on November 6, 2019.
Credit: Mike Cohen/ The New York Times
Airbnb plans to lay off nearly 1,900 employees, or about 25% of the company, a person familiar with the plans confirmed to CNBC.
The layoffs were first reported by The Information, which reported the news would be broken to employees by CEO Brian Chesky in a call starting around 3pm ET.
“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Chesky told employees according to a copy of his prepared remarks. “Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”
Prior to the layoffs, Airbnb had 7,500 employees, Chesky said. Airbnb will halt projects related to hotels, a transportation division and luxury stays, Chesky said.
“Travel in this new world will look different, and we need to evolve Airbnb accordingly,” he said.
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.
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.