Airbnb CEO Brian Chesky sent a note to his staff on Tuesday morning saying he had to "share some very sad news."
He was letting them know that the home rental company had decided to layoff around 25% of its employees, which is roughly 1,900 people out of its 7,500 workforce. It's one of the largest single layoffs by a Silicon Valley company since the novel coronavirus pandemic sent the world reeling.
"When you've asked me about layoffs, I've said that nothing is off the table," Chesky wrote to his employees. "This is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb."
Airbnb has experienced a financial hit during the pandemic. It's seen tens of thousands of canceled reservations and plummeting revenue. The company was on track for an initial public offering this spring, but reportedly postponed those plans. In his letter to employees, Chesky said revenue for Airbnb this year will be less than half of what it earned in 2019, which was reportedly $4.8 billion.
Other tech companies with a focus on travel have also announced loss in revenue and layoffs over the past month. Lyft said last week it was letting go of 982 employees, or 17% of its staff. And Uber is rumored to be laying off as much as 20% of its workforce, which would total about 5,400 people.
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"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."
Airbnb took on $2 billion in debt last month in an attempt to stay on its feet, but it appears that influx of money wasn't enough to stave off the mass layoffs.
Along with letting go of hundreds of employees, the company is also preparing to scale back spending on newer projects, such as its push into boutique hotels and luxury rentals. Chesky said Airbnb's plan now is to hone in on a "more focused business strategy" that gets back to the company's core product of renting out people's homes.
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Chesky added that he came to these decisions because it's unclear when people will start traveling again and when they do, "it will look different."
For those staff who've been laid off, Airbnb said its offering them at least 14 weeks of severance, equity in the company and 12 months of health insurance.
"I am truly sorry," Chesky wrote in his note to staff. "Please know this is not your fault."