Airbnb is cutting around 25% of its global workforce
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Airbnb says it’s letting go a quarter of its global workforce and refocusing its business priorities. The short-term property rental company expects its revenues will be cut by at least half this year, given the COVID-19 pandemic.
Marketplace’s Nova Safo has followed the numbers on this story.
“Nearly 1,900 people will lose their job,” he told “Marketplace Morning Report” host David Brancaccio. “We don’t know how that breaks down by country. The company operates in two dozen countries.”
Affected employees in the U.S. and Canada were informed of the cuts Tuesday. Co-founder and CEO Brian Chesky said in an all-staff memo that Airbnb must refocus for a post-pandemic travel industry that will be different than what it was before the coronavirus.
Airbnb had been investing in things like bringing hotels onto its platform, more high-end properties. It was also making efforts in transportation, looking at flights, potentially. Some of those initiatives are now on pause or being scaled back.
This is a wrenching reversal of fortune for a company that’s been valued at tens of billions of dollars, and was planning sell its stock to the public this year. It’s also been a nightmare for people depending on money from visitors paying to stay at their places.
In terms of how this affects the travel industry more widely, Makarand Mody, professor of hospitality marketing at the Boston University School of Hospitality Administration, says this could be an opportunity for Airbnb’s competitors.
“Across the travel industry, that might in a sense roll back the years and allow some of the other players in the travel industry to really double down in some of the things that they did well,” Mody said.
He thinks there may be more hotel consolidations, because boutiques that were relying on Airbnb will now get gobbled up by big chains.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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