May 5th marked an unfortunate date for the Airbnb workforce, with the chief executive officer revealing that 25% of employed staff will be furloughed until the pandemic is concluded. This accounts for 1,900 workers losing their positions with one of the more notable Silicon Valley corporations. It also marks the 2nd largest series of layoffs with a company operating in Silicon Valley. Furloughed employees won’t receive internal support from Airbnb & will be required to inquire assistance from government funds.
The Airbnb email clarified that multiple employees had questioned the possibility of layoffs, with executives informing these individuals that everything is a possibility. Sentiments in this email enforced sadness behind this decision, with corporate not wanting to furlough any of their workforce. The Airbnb CEO and Board of Executives had hoped the financial repercussions of COVID-19 wouldn’t enforce company-wide layoffs. However, 100+ thousand reservations worldwide have been cancelled for Airbnb and revenue is plummeting drastically. This forced the rental corporation to re-strategize their coronavirus plan, which included delaying the initial public offering of Airbnb.
It should be noted that Airbnb inquired $2 billion in debt during April, using these funds to maintain business operations. This substantial loan wasn’t formidable enough to ensure the protection of Airbnb’s full workforce. When questioned on their thoughts regarding this unfortunate decision, the chief executive officer for Airbnb mentioned that their living through an unprecedented time, where people are having to do thing nobody thought would be possible. This has applied to Airbnb and forced us to implement this decision.
Airbnb also confirmed through this company-wide email that 2020-21 Projects would be postponed. This includes the arrival of boutique hotels owned and operated directly through Airbnb. Luxury Rental Office Spaces were also slated for 2021, which is being avoided to focus on prominent business strategies regarding regrowth. Most corporations will be forced to implement similar measures to ensure their survival.
Airbnb hasn’t been the exclusive operator in this marketspace to confirm losses in revenue, while also terminating a percentage of their workforce. Lyft also saw profits drop by substantial percentage, prompting 17% of their workforce to be furloughed. Uber followed after lifts confirmation of laid off employees, announcing 20% of their staff have been furloughed.