The coronavirus pandemic has hit the traveling industry the hardest. With international and domestic travel banned, many airlines have filed for bankruptcy. The hospitality industry has been hit hard as well, with hotels and Airbnbs suffering. Airbnb is a market leader in its industry, providing low-cost hospitality services to those who cannot afford fancy hotels, or just prefer to save money. However, the 2020 Coronavirus financial crisis has hit the company hard. On 5th May, Airbnb announced that it would be laying off almost 1,900 employees, nearly 25% of its workforce. Here is the story behind how the company got here, and what we can learn from Airbnb’s lay-off announcement.
Coronavirus hits the Hospitality Industry
While every business around the world has suffered due to the pandemic, the hospitality industry has been hit especially hard. With travel limitations in place for months now, hotels, resorts, and Airbnbs have had no guests and hence no income. Brian Chesky, Joe Gebbia, and Nathan Blecharczyk founded Airbnb in 2008. Since its inception, it has become the world’s largest online platform for short-term rental services around the world, with many people seeing it as a viable, cheaper alternative to hotels. However, with the outbreak of the coronavirus, travel has stopped, and Airbnb customers have vanished. The company has been unable to keep their rooms and homes afloat, causing monumental losses. Hence, the employee lay off has not come as a surprise.
With more than 30 million people unemployed worldwide (and counting), Airbnb laid off around 1900 employees out of its total of 7,500. This amounted to nearly Airbnb laying off nearly 25% of their employees. Fellow share-economy operators such as Uber and Lyft have been forced into something similar, with significant layoffs on the agenda. Uber announced a downsizing of about 20% of its workforce. Lyft followed suit with plans to lay off nearly 1,000 employees, amounting to nearly 175 of theirs. However, every company implements laying off policies differently. This defines their leadership and business acumen with respect to the manner in which they deal with their employees. Airbnb showed a great example of this in their laying off of employees.
Compassion and Empathy while laying off
While unemployment is a bitter pill to swallow, laying off should be done with care for your employees. Some companies forget this key feature and end up being cold and abrupt while implementing firing policies. This is a process in which employees rarely ever know the reason they were fired for as they are shown the door before you can complete the word “goodbye”. In situations like these, transparency and candidness are quite important.
Airbnb provided us all with a lesson in leadership by being compassionate and empathic in their implementation of the massive layoff. The company’s CEO Brian Chesky was straightforward in his announcement, stating harsh realities that all of us were facing. He ensured full transparency to all employees with regard to the current situation of the company. Chesky further mentioned that the decision being undertaken was independent of those people’s work, stating that other companies would be “lucky to have them”. Airbnb said it would support those they are laying off, extending the offer to help in placement and career advice. This is something many businesses and startups could learn from, making the best out of a horrible situation.