Airbnb to cut workforce by 25% amid virus lull

Airbnb is to lay off 25%, or nearly 1900 out of its 7500 employees from its workforce, the company announced on Tuesday.

The home-sharing and rental company has suffered a setback because of the coronavirus pandemic, which has brought global travel to a virtual standstill.

Read more: Airbnb bans 'party houses' after deadly shooting

"We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill," said Brian Chesky, CEO of Airbnb, in a letter to employees. 

Workers are expected to be laid off across global operations of the San Francisco-based company. Severed employees in the US will receive 14 weeks of base pay, and one additional week for every year at the company. Airbnb also said it would provide benefits such as 12 months of health insurance to laid-off workers.

Founders to take no salary

AirDNA, a company that monitors the bookings for Airbnb, said that US bookings fell 53% in the period between February 3 to April 13.

Airbnb was valued at $31 billion a few months ago, and planning a highly anticipated Initial Public Offering. This March, the 12-year-old company suspended marketing activities to save $800 million (€738 million) in 2020. 

The founders of the company had said they will take no salary for six months, and top executives would take a 50% pay cut. Airbnb had also allocated $250 million to help offset losses incurred by the hosts, after the pandemic led to booking cancellations. The site lists around 7 million properties worldwide.

Airbnb had earlier revealed plans to focus on long-term stays, for which demand had increased. The company had also announced new cleaning protocols to meet hygiene standards due to fears of the spread of COVID-19. 

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tg /rc (AFP, Reuters)