Retail

Airbnb Says 2020 Revenue Will Be Halved

Airbnb

Despite an infusion of $2 billion from investors last month, Airbnb said the pandemic has forced the layoff of 1,900 employees, or 25 percent of its workforce, CNBC reported.

“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Brian Chesky, Airbnb’s CEO told employees in a note on Tuesday (May 5). “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 in two dozen countries, Chesky said.

In his letter to workers, the 38-year-old Airbnb co-founder didn’t hold back.

“While these actions were necessary, it became clear that we would have to go further when we faced two hard truths: We don’t know exactly when travel will return,” he wrote. “When travel does return, it will look different.”

Chesky’s words came as the Transportation Security Administration (TSA) reported the number of travelers who went through its security gates on May 4 was 163,692 compared to 2.5 million for the same day one year ago.

He said its U.S. employees laid off will receive 14 weeks of base pay plus an additional week for every year they worked at Airbnb. The company will also provide one year of healthcare for laid off workers, he added.

Last month, Airbnb told its employees it would institute a hiring freeze, suspend its marketing and cut executives’ salaries. The company also said at the time that it did not expect to give out bonuses for 2020.

Also in April, as reported in this space, Airbnb had its second investment of $1 billion from investors.

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.

In closing, Chesky said, “I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb … that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.”

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