The popular online marketplace for easy accommodation, Aribnb, has taken a massive knock due to the drop in travel caused by COVID-19. CEO, Brian Chesky has detailed the extent of their business troubles, on 5 May.
In a blog post Chesky said that they are ‘collectively living through the most harrowing crisis of our lifetime.’
As a result of the lack of profits, the company announced that it would be reducing its work force by 25%. Chesky tried to explain why this is a necessary step.
‘Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019. In response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb,’ he said, noting that they realised additional actions were necessary because they were unsure of when travel will return and what it will look like when it does.
‘While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy,’ he added.
Chesky said that of the 7500 Airbnb employees, about 19000 will have to leave. In his letter he detailed issues of, severance, equity and job support for those leaving the company.
The new business model will be more focused. ‘Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection,’ he said adding that the pandemic has ‘sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences.’
‘This means that 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.’
Chesky said that when Airbnb started, the focus was on the human part of travel, the part that includes belonging and love. ‘The world needs human connection now more than ever, and I know that Airbnb will rise to the occasion,’ he said.
Image: Pixabay
