It’s a brutal time for travel, and Airbnb is no exception. It’s laying off 1,900 people, 25% of its staff. But the way that CEO Brian Chesky did it is exemplary — with compassion and a clear explanation.
There was no way that Airbnb would survive the pandemic unscathed. Revenue had been cut in half. People are afraid to stay at other people’s houses. So a layoff was virtually inevitable.
Chesky’s email is logical, well organized, makes it clear not just why they made the decision but how they chose who to let go, and explains all the severance details. It’s over 1,500 words long, but sometimes that’s what you need to be clear and empathetic. Let’s see why it works. Excerpts below.
Analysis of the Brian Chesky layoff memo
Team . . .
This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news.
When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce. For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb. I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next.
No burying the lead. And I credit Chesky for not promising what would have been impossible earlier — that layoffs would be avoided.
Let me start with how we arrived at this decision. We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. 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.
While these actions were necessary, it became clear that we would have to go further when we faced two hard truths:
1. We don’t know exactly when travel will return.
2. When travel does return, it will look different.
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.
There’s no bullshit here, except perhaps the promise that Airbnb will fully recover. They did everything possible to avoid staff cuts, but the revenue is down and they can’t pay people. As an employee, you may be upset with this, but you can’t argue with it — there was no alternative.
Out of our 7,500 Airbnb employees, nearly 1,900 teammates will have to leave Airbnb, comprising around 25% of our company. Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business.
This makes clear the size of the cut with a transition to explaining how they made specific decisions.
A more focused business
[W]e 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.
These decisions are not a reflection of the work from people on these teams, and it does not mean everyone on these teams will be leaving us. Additionally, teams across all of Airbnb will be impacted. Many teams will be reduced in size based on how well they map to where Airbnb is headed.
Notice the prominent use of “we,” taking responsibility for the cuts. There is passive voice in the second paragraph, it would be better have “we” there as well.
How we approached reductions
It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:
* Map all reductions to our future business strategy and the capabilities we will need.
* Do as much as we can for those who are impacted.
* Be unwavering in our commitment to diversity.
* Optimize for 1:1 communication for those impacted.
* Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse.
I have done my best to stay true to these principles.
This level of clarity in a layoff notice is unusual. Chesky rapidly gets to the “why” as well as “the how.” He follows this up with more detail on the process, described with “we;” I’ve omitted for that for space.
Employees in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb. Tenure will be rounded to the nearest year. For example, if someone has been at Airbnb for 3 years and 7 months, they will get an additional 4 weeks of salary, or 18 weeks of total pay. Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices.
We are dropping the one-year cliff on equity for everyone we’ve hired in the past year so that everyone departing, regardless of how long they have been here, is a shareholder. Additionally, everyone leaving is eligible for the May 25 vesting date.
In the midst of a global health crisis of unknown duration, we want to limit the burden of healthcare costs. In the US, we will cover 12 months of health insurance through COBRA. In all other countries, we will cover health insurance costs through the end of 2020. This is because we’re either legally unable to continue coverage, or our current plans will not allow for an extension. We will also provide four months of mental health support through KonTerra.
The first thing you want to know, after you lose your job, is “Will I get severance, how much, and will I have health care?” The memo clearly answers these questions, and follows up with the support Airbnb is giving for outplacement, which I’ve omitted for space. (They are also allowing everyone to keep their computers.)
Here is what will happen next
I want to provide clarity to all of you as soon as possible. . . .
In the US and Canada, I can provide immediate clarity. Within the next few hours, those of you leaving Airbnb will receive a calendar invite to a departure meeting with a senior leader in your department. It was important to us that wherever we legally could, people were informed in a personal, 1:1 conversation. The final working day for departing employees based in the US and Canada will be Monday, May 11. We felt Monday would give people time to begin taking next steps and say goodbye — we understand and respect how important this is.
Some employees who are staying will have a new role, and will receive a meeting invite with the subject “New Role” to learn more about it. For those of you in the US and Canada who are staying on the Airbnb team, you will not receive a calendar invite.
I’ve experienced layoffs where my colleagues found out they were losing their jobs because their elevator passes stopped working, or a surprising lump of cash appeared in their bank accounts. The process matters. What Airbnb is doing is as humane as it’s possible to be.
Some final words
As I have learned these past eight weeks, a crisis brings you clarity about what is truly important. Though we have been through a whirlwind, some things are more clear to me than ever before.
First, I am thankful for everyone here at Airbnb. Throughout this harrowing experience, I have been inspired by all of you. Even in the worst of circumstances, I’ve seen the very best of us. The world needs human connection now more than ever, and I know that Airbnb will rise to the occasion. I believe this because I believe in you.
Second, I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, “Travel like a human.” The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.
To those of you staying,
One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story. I am confident their work will live on, just like this mission will live on.
To those leaving Airbnb, I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb…that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.
Ending with a human touch and a shared mission is excellent. Continuing to work after a layoff is hard (especially when everyone is working from home). Chesky has maximized the chances that Airbnb’s remaining team will succeed.
What you can learn from this
If you’re ever in the position to have to reduce your headcount, here’s what you can take away from this:
- Write personally, human-to-human.
- Take responsibility for what you are doing. Use “we.” Avoid passive voice, which makes it sounds like the job losses are just happening to people with no one responsible.
- Explain the reasons behind the cuts, both in general and the specifics of who was cut.
- Explain as clearly as possible how people will find out, and what benefits they will retain.
- Express actual gratitude and describe the path forward from here.
That’s easy to say. It’s hard to do. But failing to do it is inhuman.