Citing revenue declines, Airbnb cuts 25% of workforce • Hacker News Board

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

#281

Post by jlbnjmn » Tue, May 05, 2020, 8:55 PM UTC

b212 wrote: post #264

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…

"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." Why? Can't they rehire the people they laid off during this period?

After rereading the article, it appears the layoffs are isolated to side projects. So it looks like just a healthy focus on the actual business.

And for everyone previously asking why they needed so many employees, the answer is apparently they didn't.

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

#282

Post by HumblyTossed » Tue, May 05, 2020, 8:55 PM UTC

markdown wrote: post #165

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…

> Separated employees Separated? Is this American english?

Companies go out of their way to use words that they hope will soften what is actually happening.

Separated almost sounds as if this was consensual.

That being said, Airbnb gets some credit for a decent severance.

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

#283

Post by khalilravanna » Tue, May 05, 2020, 8:57 PM UTC

supernova87a wrote: post #249

If Airbnb is willing to pay 14 weeks (3.25 months) of severance, they must believe this is going to go on significantly longer than that. Or they're using this as an opportunity to cut underperformers at the same time. Because if they believed things would start to recover by fall, wouldn't you just pay the people as normal and make a judgement call around then? You're spending the payroll money either way -- 14 week…

Depends. I'm a finance noob but I think there's a big difference from an accounting perspective to say "we have a big expense to pay for the next ~14 weeks" versus "we have a big yearly expense that will continue in perpetuity". I think this bookkeeping is especially important when looking for funding. Perhaps someone with more savvy and better articulation of the nuances can chime in here. (I'm interested myself on if I'm way off the mark here.)

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

#284

Post by nrmitchi » Tue, May 05, 2020, 8:59 PM UTC

capocannoniere wrote: post #58

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.

While Airbnb is clearly going through a rough patch right now, there is a clear bull-case argument for why Airbnb will emerge stronger than it's ever been after this: - Airbnb has sufficient cash in the bank to survive the crisis. - A significant % of hotels and budget chains will not survive the crisis --> decreased competitor supply - People will be looking for budget options when traveling --> increased demand for…

There may very well be a clear bull-case argument for Airbnb being successful long term, but at the moment that's not really the point.

Any long term employees who have been around long enough to even have the decision to make regarding exercising options (from other comments it appears that Airbnb switched to RSUs at some point), would be facing a massive tax liability this year.

It is clear that there will be some debate and uncertainty around a fair-market-value for Airbnb shares in light of COVID, but AFAIK any capital gains, and therefore tax liability, will be based on their most recent funding rounds (which were obviously based in the pre-COVID world)

Edit: typo-d a word

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

#285

Post by freewilly1040 » Tue, May 05, 2020, 8:59 PM UTC

duxup wrote: post #213

mdamore wrote: post #161

I can only hope this leads to a backlash against high growth companies staying private for so long. Along with their jobs, I imagine many AirBnb employees have lost a majority of their (paper) net worth because they were not given the opportunity to sell and diversify.

I think if any employees were relying on that paper wealth... that's the problem. IMO People need to understand what that really is (usually not much) rather than blame the company.

The point is that in this case there was real wealth that could have been released had they done an IPO

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

#286

Post by ThisIsTheWay » Tue, May 05, 2020, 9:00 PM UTC

user5994461 wrote: post #267

ThisIsTheWay wrote: post #239

Earlier quoted context omitted.

Provide a source for that 500 headcount... Hotels.com lists 1100-1500 employees depending on where you look, and LinkedIn shows ~1600 employed by Hotels.com today. With that said, Hotels.com is owned by a multi-billion dollar conglomerate called Expedia, which employees ~24K people across multiple brands. AirBnB is operating on their own.

Worked there a few years ago. Should be double now since they've extended to and filled a new building. The whole group with Expedia was something around 15k if I recall well. It includes more than a hundred independent brands and products, plus a few massive white labels, covering an order of magnitude more languages and currencies than AirBnb. So better not compare the whole conglomerate to AirBnb (except as an evi…

Wikipedia lists ~12K employees at AirBnB, so I agree that some additional clarity would be needed to understand the discrepancy.

If you compare the ratios of operating income vs headcount between the two, the companies are nearly identical based on the metrics available in Wikipedia today.

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

#287

Post by vmception » Tue, May 05, 2020, 9:01 PM UTC

dominotw wrote: post #50

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…

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

COBRA is the same as the plan you had with your company. Most companies pay half, some pay 75%, some pay 100%, so it can be a sticker shock to many.

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

#288

Post by b212 » Tue, May 05, 2020, 9:01 PM UTC

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...

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

#289

Post by Domenic_S » Tue, May 05, 2020, 9:02 PM UTC

monktastic1 wrote: post #251

mav3rick wrote: post #238

Earlier quoted context omitted.

It happens at both F & G in FAANG.

Monthly vesting in the first year?

Can confirm that at G.

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

#290

Post by three_seagrass » Tue, May 05, 2020, 9:02 PM UTC

gaukes wrote: post #24

nightshadetrie wrote: post #2

The most famous unicorn bleeds today.

Acquisition target IMO. While AirBnb bleeds, the FANGs continue to pile up cash. Google, Facebook, and Apple all have enough cash to buy several AirBnbs rn.

Don't be fooled by the Q1 results that only cover a few weeks of the shutdown - FANGs are hurting too.

30 M unemployed and growing means no disposable income for consumer businesses, which in turn are shutting down and shrinking their spending on B2B services. The latter is delayed and won't be fully visible until Q3.