Airbnb, the largest online marketplace and one of Silicon Valley’s most financially secure unicorns, succumb to the financial challenge and uncertainty the COVID-19 pandemic brings. The company announced in a note Tuesday that it will be laying off a quarter of its staff or 25.3% — totaling 1,900 jobs.
Brian Chesky, Airbnb’s founder and CEO, stated via email that the company’s revenue for 2020 is projected to be half of its 2019 revenue, which is reportedly $4.8 billion. Since the previous weeks, the company secured a $2 billion debt to combat the global economic crisis caused by the pandemic.
All existing reservations are free to cancel without penalty. Airbnb’s capital was “presumably” allotted to fund cancellation, provide financial assistance to hosts, and a safety net to reshape the company in 2021.
Hence, in dire measures to streamline the company and compensate losses, Airbnb resorted to job cuts and backing down its growth scaling plans into luxury and traditional hotels. Concerning its expected 2020 IPO, Airbnb declined to comment and sorted that the company will recover in time.
Airbnb is Silicon Valley’s most profitable firm with a strong financial footing entering 2020 and is expected as a leading candidate for an initial public offering.