American tourism experiences platform Airbnb is laying off about 25% of its workforce as the COVID-19 pandemic halts the travel industry and threatens the company’s core business. Airbnb China has also started the layoff process. Sources said that employees received the email from Brian Chesky, Airbnb’s CEO at 12:00 PM on May 5, before which rumors of a massive layoff had already been spreading among employees.
In a memo to employees released on May 6, Airbnb co-founder and CEO Brian Chesky said the company plans to cut nearly 1,900 jobs worldwide, a quarter of its 7,500 employees, to cut expenses.
Airbnb announced two $1 billion funding deals in quick succession just last month. Even so, industry insiders say that with Airbnb seeing a sharp drop in bookings and tight finances, its IPO process is likely to be affected. According to Chesky’s open message, Airbnb’s revenue this year is forecasted to be less than half of that in 2019.
Chesky also stated that the company is transforming to a more focused business. “We will need to reduce our investment in activities that do not directly support the core of our host community. We are pausing our efforts in Transportation and Airbnb Studios, and we have to scale back our investments in Hotels and Lux,” said Chesky in his note to Airbnb employees.
According to a person familiar with the matter, Airbnb has more than 550 employees in China, most of whom are based in Beijing. The source also said the company will start one-on-one meetings with employees starting May 7 and will likely finish the layoff process by the end of this month, downsizing less than 25%.
Airbnb is reportedly experiencing a rebound in China as data from AirDNA, a separate analytics firm shows the number of domestic bookings in China for the first half of April were up more than 200% compared with the same period in March.
Airbnb declined to comment on its layoff details in China. The company added that Airbnb is still committed to long-term development in the Chinese market.