Via Yahoo Finance

Airbnb is firing more than 25pc of its global workforce as it grapples with a “harrowing” economic crisis and a potentially permanent freeze on global travel.

In a letter to employees on Tuesday, chief executive Brian Chesky said he had no choice but to lay off 1,900 people and dramatically narrow the company’s focus by cutting experimental projects.

Warning that the havoc wreaked on Airbnb’s business would not be “temporary or short-lived”, he described a plan to go “back to basics” by nixing investments in hotels and  transport.

The loss-making holiday rental start-up, whose planned public float had been one of the most hotly anticipated debuts of this year, has suffered a drastic drop in bookings and revenue since the pandemic began, and expects to bring in only half as much money this year as it did in 2019.

The layoffs come despite previous rounds of cost-cutting and an additional $2bn in venture capital and debt funding, which may be necessary to keep Airbnb afloat until the end of the year.

Mr Chesky said: “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. 

“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.

“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.

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“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.”

The laid off employees will receive 14 weeks’ pay in severance, plus extra payments reflecting the length of their time at the company.