Posted on 05/07/2020 2:02:10 AM PDT by fluorescence
Airbnb is letting go of a quarter of its workforce, co-founder and CEO Brian Chesky told employees in a memo on Tuesday, as the coronavirus pandemic has decimated demand for his company’s services.
The home-sharing platform, which was widely expected to go public this year, becomes the latest sharing economy company to institute or consider instituting significant layoffs. Uber is reportedly considering laying off 20% of its workers while Lyft has already laid off 17% of its employees.
"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 wrote. “Airbnb’s business has been hit hard."
Chesky said that the revenue forecast for the year is less than half of last year’s level, noting that global travel has come to a halt as a result of the coronavirus pandemic.
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.
Chesky noted that the company doesn't know exactly when travel will return and that when it does return, it will look different.
"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 said that 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.
Employees in the U.S. will receive 14 weeks of severance plus one additional week for every year at Airbnb. And U.S. employees will have 12 months of health insurance covered.
Not surprised, travel and travel related services are goping to take a beating this year.
Even without the shutdowns, an epidemic like this just kills leisure travel. I expect that even after things open up, folks will stay closer to home and do more day trips. Hotels and airlines are going to have to work hard to regain business.
Airbnb is particularly vulnerable as they, less than hotel chains, have less control over facility hygiene standards. I expect cleanliness to be a key selling point for the near future.
goping=going, pardon my fat finger.
I respectfully disagree with your statement. We currently run three Airbnb's from our home and cleanliness is a major factor in attracting and retaining customers. You see, customers rate their experience at an Airbnb and the host also rates the customer. These ratings are then made public and future customers read them to decide if they should stay at the respective Airbnb. Our cleaning standards have always met or exceeded CDC recommendations even before the pandemic hit.
Wow! A non-public company (AirBnB) that hasn’t been in existence for more than a handful of years is able to raise $2B while laying off 25% of it’s workforce. Wonder what kind of shennanigans are going on there? Are the lenders also the underwriters of the IPO, I wonder? Would that be a conflict of interest?
Aren't the drivers, homeowners, etc. "independent contractors"?
I’ve rented from and Airbnb and VBRO and have friends who have as well. My rental experiences have been fine, no major issue, though honestly I personally prefer and am more comfortable in hotels. One of my friends generally prefers Airbnb (big family), so the preferences of the diminished population of travelers will play a big role.
The challenge for you and your peers will be the percentage of potential customers who dismiss Airbnb, VBRO, and other sites as an option out of hand. If they never visit a site, they’ll never see a listing. Hotels will have the reverse issue, people who dismiss them out of hand and prefer Airbnb etc.
My guess (and that is all it is) will be that overall more people will stick with hotels over the near term, but it is only my guess. I wish you well, and good luck to you with your properties.
Our particular situation is most fortunate as we own about 100 acres, all forested and have created walking trails. All of our Airbnbs are outdoor (Tiny house Octagon on a brook, Tree house and a new tiny house on a brook). It's ironic but business has never been better and I think it's because people are tired of being pent up in their homes and we offer an Outdoor experience like no other.
Thank you again for your kind words and I hope you are well.
iirc airbnb is based in san francisco’s south of market district. although it has worldwide operations, it conceives of itself a quintessential san francisco hipster/venture enterprise. the $2b is probably imho long term venture capital.
i have just recently tried an airbnb place, in italy. the owners were relatively new to airbnb. cleanliness was not an issue but kitchen safety was and someone in my party was (slighty) injured. there was also utility damage which i paid siince the owner viewed the fault as a guest fault. it was not something that would be tolerated for long at a hotel. the operators acted as if afraid of airbnb corporate. i think the major issue with airbnb might be relatively new airbnb operators and lax safety regulations. i think part of the problem might be the corporate attitude which might be a bit above reproach.
Airbnbs can be great... or they can be a nightmare if you have a bad host. My horror story isn’t that bad, but still annoying. Had a minor misunderstanding with the host via the messaging system during the stay, but it was resolved and cleared up once the host actually got back to me in three days. Or so I thought. At the end of the month-ish stay, we made sure the place was cleaned, including doing an overall clean of the place and running the bedding and towels through the wash one last time, but we admittedly didn’t have time to put the dishes away (they were cleaned) and in one of the rooms we left a comforter that we hadn’t needed to use on the floor in the corner. (That one had simply slipped our mind.) Well, we got a horrible review calling us dirty and saying that we left things where we didn’t find them etc. I understand that AirBnBs aren’t hotels, but when you charge a large cleaning fee, the least you can do is deal with a comforter on the floor and dishes in the dishwasher. For almost a month stay, that’s actually great condition in my opinion compared to the stains and mess many slobs would have after that time. Maybe the host was still upset about actually having to respond to some message part way through, I don’t know, but having to put up with lies like that or worrying about reviews is one of the big negatives of airbnb. And before that experience, I praised the service to no end.
“Hotels will have the reverse issue, people who dismiss them out of hand and prefer Airbnb etc.”
I stay (or stayed) at hotels as RARELY as possible once they started sealing their windows shut (to save the environment, thanks Greta) and then added central control to air conditioning, making the rooms hot and stuffy. Now, with their recirculating air, I might as well be on the Diamond Princess or in an airplane as far as my risk of Coronavirus is concerned.
So AirBnB for now, and forever!
7500 employees? I thought Airbnb was run by one guy out of his basement...maybe his wife as a part-timer.
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