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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

#351

Post by dschnurr »

lacker wrote: post #12

There are going to be a lot of tough decisions for people who have to decide whether to buy their Airbnb options or lose them. I bet a lot of people at Airbnb are wishing they went public before all this.

going public at any point after nov '19 probably would have been a disaster for most employees due to lockup period. Let's say I have $1M of RSUs at IPO – fed+state gov wants 450-500k for taxes total. When I went through Uber IPO they only withheld ~30%, which leads to a $200k tax bill at the end of the year in this scenario. If stock declines 75% due to COVID before I can sell at expiration of lockup period, I'm left with $175k ($700k post-withholding * 25%) and $200k tax bill. Not sure about you but I'd prefer the non-IPO scenario.

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

#352

Post by tjs8rj »

beagle3 wrote: post #275
jlbnjmn wrote: post #118

Earlier quoted context omitted.

Good point. If they're wanting to part ways with 25% of the workforce now, covering 3 months of full salary and 12 months of expensive healthcare, they must be expecting fundamental market shifts. Also, the debt they took on may have been partly to cover these lavish severance packages while also extending the runway. And yes, this is extremely lavish. Paying severance that appears roughly equal to the median annual…

It is generous by US standards, but it's just nice for many other western countries, where the standard is a few months of salary, or e.g. one month salary for each year worked (that is, if you had worked for the company for 5 years, you get at least 5 months salary on termination -- Israel mandates that one by law, for example, and NOT paying it is considered a criminal violation performed by the employer)

Don't get the idea that those are free lunches. They are factored as an expected value in your total compensation for sure. It's part of the reason that median incomes in the US are much higher than Europe and everywhere else: less benefits requires higher cash compensation for the same marginal product.

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

#353

Post by r00fus »

niij wrote: post #337
xenospn wrote: post #335

Earlier quoted context omitted.

It's really strange to me that companies in the US can just determine how much severance they're "willing" to pay. Why is it even up to them?

Because it's coming out of their pockets.

So are payroll taxes, and they're not "up to the company".

We can see from the priorities how workers have been left out of the decision making for decades in the US.

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

#354

Post by silviogutierrez »

arcticbull wrote: post #320
keiferski wrote: post #10

Separated employees will receive 14 weeks of pay, and one more week for each year served at the company (rounding partial years up). The firm is also dropping its one-year equity cliff so that employees who are laid off with under 12 months of tenure can buy their vested options; Airbnb will also provide 12 months of health insurance through COBRA in the United States, and health care coverage through 2020 in the res…

Sounds amazing, I wish someone would lay me off like that, damn. Four months PTO with healthcare?!

It's confusing. Some read it as "COBRA is available at full price" and others as "healthcare paid by AirBNB". My understanding is COBRA is just the default. The company can't really block it, for 18 months. No action required.

So if AirBNB went out of their way to mention COBRA, it likely means they're covering it.

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

#355

Post by walshemj »

jbay808 wrote: post #217
mason55 wrote: post #62

Earlier quoted context omitted.

Hopefully they have cash to cover the exercise and the taxes! Tough choice to make right when you just lost your job. The tax bill could be tens of thousands of dollars or more.

It would be nice if you could just hand over a percentage of the options to the government as a tax, instead of having to pay in dollars at a guess of the value.

I am surprised that isn't an option it certainly is in the UK

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

#356

Post by alfalfasprout »

b212 wrote: post #288

I'm wondering what's the ratio of IT folks to "others" in Airbnb, I suppose most of the workforce is customer service, human resources, legal and so forth? So maybe this cut won't touch engineering teams at all? After all dev teams can still do something during times like these (eg. trying to make other unicorns) but keeping big headcount in customer service is simply burning money...

Eng was hit hard-- particularly product-facing engineers.

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

#357

Post by mlinsey »

scarface74 wrote: post #333
arcticbull wrote: post #320

Earlier quoted context omitted.

Sounds amazing, I wish someone would lay me off like that, damn. Four months PTO with healthcare?!

"Airbnb will also provide 12 months of health insurance through COBRA" That just means that it is available to you -- not that they are going to subsidize it.

Anyone who loses health insurance due to losing their employment (even if they voluntarily resign) is legally allowed to buy COBRA for 18 months. I think they are paying for it, otherwise this would be a fairly meaningless statement since the employer isn't involved with COBRA at all and that's less eligibility than any employee would have.

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

#358

Post by r00fus »

conanbatt wrote: post #342
rb808 wrote: post #338

Earlier quoted context omitted.

As a European, that isn't great. (options excepted). Usually I thought you get 14 weeks plus a month for every year of service, not a week.

And typically much higher unemployment numbers

Not these days. Europe is doing much better than the US in terms of unemployment - wonder why?

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

#359

Post by raz32dust »

justaguyhere wrote: post #197
pedrosorio wrote: post #77

Earlier quoted context omitted.

Cutting salaries in half guarantees they lose all the top performers, and probably more than half, instead of the 5 they pick. I don't believe that is the goal.

Yes, during normal times. But these are not normal times - like, who is hiring now? If I were a top performer, I'd take a salary cut if it means saving my colleague's job. I get what you are saying though. They are a business and I guess they're doing what is best for their business. The severance package is generous (relatively speaking), so there's at least that. Edit : I guess I didn't word this properly. I was sa…

> "If I were a top performer, I'd take a salary cut if it means saving my colleague's job."

Would you, really? If you can get a job at FB/AMZN/GOOG/Netflix paying the same or more, would you really stay? Highly unlikely I think.

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

#360

Post by jdminhbg »

ialyos wrote: post #329
jdminhbg wrote: post #309

Earlier quoted context omitted.

> lower levels of disposable income during the recovery. There's also going to be a lot of pent-up demand from people who didn't lose jobs and had no outlet for leisure spending during the quarantine. I'm not sure which will win out.

But most people are capped to how much they'll spend on leisure by their vacation time. So there probably isn't much headroom to be gained for people who are regular travellers post this pandemic.

Sure, but like vacation money, vacation time has also been curtailed. I'm currently not on a vacation I had previously planned and working instead, saving both time and money I would have otherwise spent.
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