More bad news coming from Airbnb
As the Coronavirus threat halts travel to a standstill, institutions from the Tourism Industry like AirBnB are on survival mode. And as hard as it is to layoff your beloved teammates, AirBnB CEO Brian Chesky announced on May 5 that the company is laying off 1,900 people, or around 25% of its 7,500 employees worldwide.
The decision was not just because of the sudden booking cancellations due to the virus, nor because the hosts have no income since March 10 and missed out of peak season earnings, nor because of the US$250 million fund that AirBnB allocated to reimburse the hosts 25% of their cancellation policy. It was also due to the long-term consequences of the COVID19. As Chesky states, “We don’t know exactly when travel will return. When travel returns, it will look different?“
So as a response, not only they would have to be reduced and reallocated teams, but they also refocused their investments by stopping programs like Transportation and Airbnb Studios, and scaling back investments in Hotels and Lux
But what’s noteworthy is how they approached the layoffs. While they had a meticulous review on who will be retained, they also gave very generous severance packages for those who they would part ways with. Aside from the generous 14 weeks of base pay plus one additional week for every year at Airbnb for US-based employees or tenure increase as for country-specific practices for other countries, the company also included:
- Equity: Company removed the required 1-year residency to avail equity. Everyone leaving is also eligible of the May 25 vesting date.
- Healthcare: For the US, they will cover 12 months’ worth of health care through COBRA. For other countries, they will only cover up to the end of 2020 due to constraints. Also, they would get 4 months worth of mental health support via KonTerra.
- Job Placement: The company started various Job Placement programs to help their Alumni find their next job, either via Internal Programs or third-party companies like RiseSmart.
- Laptop: Employees leaving can keep their Apple laptops.