Airbnb is laying off 1900 employees as Covid-19 pandemic continues to pummel the travel industry.
Brian Chesky, CEO of Airbnb wrote in an email to the staff, “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, with revenue this year forecasted to be less than half of what we earned in 2019.”
The San Francisco-based startup, which was poised to be the blockbuster stock listing of the year, has raised $2 billion in capital and dramatically cut costs in a bid to weather the slump.
“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Chesky further wrote. “Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy.” As a result, Airbnb will be pausing its efforts in transportation and scaling back its investments in hotels and luxury travel, he said.
Prior to the pandemic, Airbnb’s expenses had already been growing. In 2019, expenses exceeded $5 billion as the company sank money into new offerings aimed at increasing revenue before its highly anticipated initial public offering. The coronavirus outbreak has put Airbnb’s market debut in jeopardy.
In the post-pandemic world, Chesky is betting that travellers will want options that are closer to home, safer and more affordable. “When we started Airbnb, it was about belonging and connection,” he wrote in the email. “This crisis has sharpened our focus to get back to our roots, back to the basics.”