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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

#391

Post by c3534l »

atomic77 wrote: post #377

While I don't want to seem like I'm wishing unemployment or hardship on anyone, the implosion of Airbnb is already causing a rent price correction that was sorely needed in many cities that have become severely unaffordable. Wired published an article about this effect in London [1] and I've seen price drops as much as $500 for condos in the downtown core of Toronto on Zillow already. https://www.wired.co.uk/article/…

It's possible that while AirBnB increased demand for housing, the market could have responded by building and allocating more real estate to housing, resulting in an equilibrium. So it is at least plausible to me that an implosion of AirBnB might be good for renters in the short term as there is an over-allocation of housing, but that without AirBnB, market rates will increase to about where they were before as supply drops over time in response. The whole thing is complicated enough that there's no way I'm going to trust any single, non-academic article on the subject.

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

#392

Post by atomic77 »

drstewart wrote: post #384
atomic77 wrote: post #377

While I don't want to seem like I'm wishing unemployment or hardship on anyone, the implosion of Airbnb is already causing a rent price correction that was sorely needed in many cities that have become severely unaffordable. Wired published an article about this effect in London [1] and I've seen price drops as much as $500 for condos in the downtown core of Toronto on Zillow already. https://www.wired.co.uk/article/…

It's pretty bold to claim any and all price drops are directly attributable to Airbnb when in the middle of a recession causing pandemic that is heavily impacting normal housing/rental market activity.

I admit that both my observations, and the ones in the Wired article I cited, are anecdotal. And it's certainly not the only factor driving those rent decreases. But it's oddly coincidental that the biggest and most immediate price drops seem to be concentrated in the areas that had the most Airbnb listings, at least based on what i've looked at in Toronto.

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

#393

Post by jedberg »

The generous severance makes a lot of sense. Besides being the right thing to do, if the economy somehow does have a V shaped recovery, they may want to rehire a lot of these people.

It's a lot easier to rehire someone who still likes you than to try and find new people.

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

#394

Post by sjg007 »

elhudy wrote: post #177
saiya-jin wrote: post #172

Earlier quoted context omitted.

How come you can't cancel? Did you book at place with strict cancellation policy or is there something else?

Yes, strict cancellation policy. For those following the drama, they keep extending their extenuating circumstances policy out but it doesn't cover most of the summer yet. Apparently the circumstances are only extenuating for the immediate future.

I wouldn't worry, it will extend out.. we aren't going to be out of this mess for 12-18 months.... the US especially.

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

#395

Post by jdhn »

r00fus wrote: post #373
IkmoIkmo wrote: post #328

Earlier quoted context omitted.

I think it's quite obvious that tourism isn't going to recover back to 100% where they were in 3 months, no... Note that '100%' includes the growth prospects that Airbnb still had in January 2020. 'startups' like airbnb hire for growth. 25% workforce cut is roughly the growth prospects (20-30% per year) that airbnb had last year. So no, that recovery won't come in just a few short months. For one because there's stil…

> Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. I wonder how this is or will impact the real-estate market? Are enough people going to foreclose without inte…

This conversation has come up a lot in real estate circles. I think it depends on the debt load that people have, which means that more expensive places that have lots of Airbnb's will be hit the hardest. Anecdotally, my friend outright bought a house outside of Detroit to use as an Airbnb. With no mortgage to pay and property taxes low, he's deciding whether to wait it out until people start travelling again, or put it up for rent.

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

#396

Post by banads »

ProAm wrote: post #222
random42 wrote: post #149

Earlier quoted context omitted.

Such an odd 'I told you so' comment in a thread about thousands losing their livelihood.

I guess I was bitter because of the argument I got when originally discussing it on HN. I do feel validated. It sucks for these employees but everyone working for a VC fueled startup lives in this same boat. They had to know at any moment they might get tossed overboard, they were going to have layoffs prior to IPO as is. And AirBNB has caused plenty of strife in the communities they operate in over the years, impact…

Now is a terrible time to be gloating about such things.

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

#397

Post by jahlove »

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.

They will "cover" 12 months of COBRA, which I take to mean they'll pay the premiums:

> 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.

https://www.cnbc.com/2020/05/05/airbnb-to-lay-off-nearly-190...

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

#398

Post by jklein11 »

xenospn wrote: post #335
lostmsu wrote: post #296

Earlier quoted context omitted.

I first misread it as "14 months" (as usually you count in months), but it was way out of bounds.

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?

Most employees in the US are hired at will. This means that the companies are not obligated to continue to offer their employees work. Severance is usually paid by the employer so that the employee agrees to leave amicably and does not sue for wrongful termination.

Which country do you live in? Is it common practice for all employees to have severance negotiated as part of an employment contract? What happens if the employee decides to leave the employer before the contract expires?

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

#399

Post by TheCoelacanth »

airstrike wrote: post #37
yojo wrote: post #27

Earlier quoted context omitted.

I’m surprised they were still handing out options - don’t most later stage startups switch to RSUs? I’d hate to have to decide whether to exercise today, cliff or no cliff.

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

Which would you rather have: a $100 bill or the option to buy a $100 bill?

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

#400

Post by jedberg »

sachdevap wrote: post #385
nateberkopec wrote: post #368

Earlier quoted context omitted.

AirBnb was doing about $4 billion in revenue per year before the crash with 7,500 employees. That's about $500k revenue per employee, which is on the high end of tech industry standards. How is that bloated?

Is revenue per employee some sort of standard measure in the industry?

It is now. It started when Facebook would make a really big deal about their productivity per employee as a way of showing the incredible efficiency of their technology.

I worked at reddit at the time, and we laughed because ours was double Facebook's, despite the fact that we weren't even doing very well. But we also had very few people.

So the calculation doesn't really work at very small numbers, and also doesn't account for expenses.

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