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Citing revenue declines, Airbnb cuts 25% of workforce

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Re: Citing revenue declines, Airbnb cuts 25% of workforce

#131

Post by mycall »

ping_pong wrote: post #110
eganist wrote: post #68

Earlier quoted context omitted.

> I'm shocked that 2020 revenues will come in only 50% below 2019 This is a fair point, but it also suggests strongly that a significant minority of their business is month to month rentals, possibly in place of leasing. And hey, being frank, I wouldn't mind considering going somewhere else for a few months now that I can work remotely for a while.

I would too, but the thing holding me back is if the shit hits the fan, and I need to do something like buy a freezer to store extra food, I can't conveniently do that in an Airbnb. And if I somehow get sick, I'm at the mercy of the doctors and hospitals in this foreign land. I'd rather be in my own home with the doctors and hospital system that I'm familiar with. I think more than 50% of people feel this way, which…

> This is catastrophic for Airbnb.

They have a functional system. If they can maintain it going on the cheap, they can pull themselves back up. Still, this gives times for alternatives to come and drink their milkshake.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#132

Post by mhluongo »

itsmefaz wrote: post #98
schkkd wrote: post #44

Earlier quoted context omitted.

That's why when a yet another aspiring startup wants to hire me, I ask for a high sign on bonus as an insurance, monthly vesting cycle, at least 200k in base pay and high severance upon termination. Never been given that, but I don't regret: looking back, all those "just 1 year till IPO" companies are underwater.

I think I'm missing something here.. but how can one negotiate severance pay for termination. I was under the assumption that companies offered severance pay as a means to save face.. and this is not part of the offer negotiation.

> I was under the assumption that companies offered severance pay as a means to save face.. and this is not part of the offer negotiation.

Quite the opposite- this is how exec compensation works. It seems less common in startup land but I've dealt with it before

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#133

Post by mrkramer »

ThisIsTheWay wrote: post #123
cbhl wrote: post #94

Earlier quoted context omitted.

I was under the impression they were pivoting rather hard into events, to diversify their income streams?

I don't understand how AirBnB can pivot to events - the locations managed through their site tend to be quite small... Can you clarify?

I think he was referring to "Experiences" section on Airbnb where you can go surfing, kayaking and stuff like that.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#134

Post by gonehome »

philwelch wrote: post #93
airstrike wrote: post #37

Earlier quoted context omitted.

Why would you not want optionality? Optionality always has carries an intrinsic positive value.

1 RSU is worth 1x the stock price. 1 option is worth the delta between the stock price and the strike price, meaning 1 RSU is always worth more than one option. Usually you get more options than you would RSU’s to compensate for this, but there’s still a risk/reward tradeoff. I have had stock options that ended up worth $0 because they were underwater. RSU’s would have been worth $non-zero. The fact that RSU’s retain…

You don't necessarily get taxable income from RSUs [edit: when they're granted] if they're structured in a 'Facebook Style' RSU which has an expiration if the company does not IPO within a certain time frame.

As long as there's a real risk of loss you can avoid the taxable income and private companies with high valuations will do this to help employees avoid the bad tax situation on an illiquid asset (without need to have huge amounts of cash to exercise options).

Options similarly must expire after 10 years for similar risk of loss tax reasons (as I understand it).

I was told the RSUs are 'Facebook Style' because they were the first to pioneer this.

Even options with a low strike price can be problematic because tax law is dumb and charges tax on the spread before sale when you exercise (so you can end up with a huge tax bill on exercise without the ability to sell the shares to cover it). ISOs were supposed to prevent this, but AMT has not increased to match inflation over time and was never updated to accommodate for this case specifically so you still have to pay tax if you hit it (which you will because it's low). This wasn't considered originally because companies intending to IPO were not private >10yrs so expiration risk was not a serious problem and you could just wait for the IPO before exercise.

So with options even if you save the exercise cash you have to save a large amount for taxes depending on the spread, or deal with a bunch of loan shark like companies that will take a cut to front you the capital.

For most people RSUs are probably preferable unless you get in really early and can exercise all the options when the spread is zero (preferably with an 83b election for early exercise on non-vested shares).

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#135

Post by greglindahl »

hn_throwaway_99 wrote: post #85
dominotw wrote: post #50

Earlier quoted context omitted.

I found COBRA to be extremely expensive. I instead enrolled in obamacare via job loss exception.

My read of that is that AirBnB is paying the premiums for the next 12 months, as regardless of what the company does all employees are eligible to stay on their employee plan and pay their own premiums for 18 months.

... COBRA is 36 months for California employees.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#136

Post by Apocryphon »

xwdv wrote: post #46
actuator wrote: post #19

It feels bad that this happened to one of the companies with a very good engineering culture. The stuff they have put out in the open either on GitHub or through their blogs is a testament to that. I think any company will be lucky to have these folks.

Good engineering culture, bad company, user hostile.

Dubious product quality:

https://news.ycombinator.com/item?id=22810407

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#137

Post by SamReidHughes »

itsmefaz wrote: post #98
schkkd wrote: post #44

Earlier quoted context omitted.

That's why when a yet another aspiring startup wants to hire me, I ask for a high sign on bonus as an insurance, monthly vesting cycle, at least 200k in base pay and high severance upon termination. Never been given that, but I don't regret: looking back, all those "just 1 year till IPO" companies are underwater.

I think I'm missing something here.. but how can one negotiate severance pay for termination. I was under the assumption that companies offered severance pay as a means to save face.. and this is not part of the offer negotiation.

For some high-level positions, it gets negotiated up-front. You're leaving some other company, taking a risk, and there's a good chance you might not be right for the new company.

But if you're less high-level but rare and desirable, well, some situations, like moving cross-country, might make it a bit appropriate.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#138

Post by duxup »

rightbyte wrote: post #102
KoftaBob wrote: post #60

Earlier quoted context omitted.

"In many countries, the severance pay is a lump sum that increases with the employee’s tenure in the company and their wage level. In the Czech Republic, Denmark, Hungary, Italy, Lithuania, Poland, Portugal, Slovakia and Spain, employees with service of up to one year are entitled to severance pay (in most cases one month’s pay), while in Luxembourg employees have to have a minimum of five years within the organisati…

Do the employees have to work during these 3 months? It is not clear from the article. If not, it is quite "competitive".

It's not severance if you're working. Severance comes after you're not working.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#139

Post by philwelch »

redshirtrob wrote: post #127
philwelch wrote: post #93

Earlier quoted context omitted.

1 RSU is worth 1x the stock price. 1 option is worth the delta between the stock price and the strike price, meaning 1 RSU is always worth more than one option. Usually you get more options than you would RSU’s to compensate for this, but there’s still a risk/reward tradeoff. I have had stock options that ended up worth $0 because they were underwater. RSU’s would have been worth $non-zero. The fact that RSU’s retain…

The other relevant point, in favor of RSUs is they usually have a double trigger for settling. One is service time, and the second is an equity event. Which is nice because you basically earn the RSU based on service time, but it doesn't truly settle until there's a liquid market available to dispose enough shares to cover tax liabilities. This is why you'll see recently IPO'd companies reporting large one-time equit…

Yeah I’ve never seen how this works during an IPO cycle, just in an already-public company.

Re: Citing revenue declines, Airbnb cuts 25% of workforce

#140

Post by ThisIsTheWay »

ProAm wrote: post #52

I called this 3 weeks [1] ago and no one believed me. Were are going to see A LOT of this the next 3-4 months as large companies experience bad quarters. These are the companies that were setup and run well (i.e. not day to day, burning stacks of money with no revenue). [1] https://news.ycombinator.com/item?id=22901720

MANY people called this, especially after they announced salary reductions at the top over a month ago. [0] This is not at all a surprise or unexpected.

https://www.inman.com/2020/03/30/airbnb-announces-drastic-co...

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