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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

#411

Post by jedberg »

ping_pong wrote: post #53

I'm shocked that 2020 revenues will come in only 50% below 2019. I don't think anyone will be travelling for the bulk of this year, especially with the looming threat of potentially getting sick in a foreign country or away from your home. It will take 5+ years for them to get back the same level of inventory/hosts/customers as they had in 2019. Many hosts will foreclose on their rented properties during 2020 or conv…

I was too, but I have a few friends who own multiple AirBnBs. They are all fully booked with long term renters. Some of them were forced to stay because they have nowhere to go.

So I guess it isn't quite as bad as you'd imagine. I'd guess the purely vacation rentals are suffering, but the ones that were typically business renters could be converted to long term.

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

#412

Post by junar »

gonehome wrote: post #193
cyan_atrus wrote: post #183

Earlier quoted context omitted.

i think you're saying this, but just to clarify: RSUs (even facebook-style) are definitely taxable. With options, you're in control of when to take the tax hit. With facebook-style RSUs, the tax hit comes when the stock gets distributed (taxed as ordinary income) -- usually in the form of withholding some amount of shares. --- Important to remember with RSUs in pre-IPO companies: even though you might get shares dist…

Yes, thanks for the clarification. My understanding is they're taxable, but only after they're liquid which makes it easier for the employee. I think most companies doing FB style do something fancy to avoid the distribution tax lockout issue (witholding some to cover tax or direct listing to avoid lockout). The situation where you have a huge tax bill and no cash to pay it (or worse a huge tax bill and your illiquid…

Actually, underwithholding can still happen. Employers may withhold at a flat 22% federal rate, which can be significantly lower than a highly paid employee's actual marginal tax rate. So the employee may still need to increase the withholdings on their regular pay, or make an estimated tax payment for each quarter of RSU income.

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

#413

Post by llamataboot »

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…

I mean, personally I think a year is a better time estimate for connectivity returning (and maybe 3+ for economic recovery) but you are also looking at some specifics to airbnb here - much of their growth was people converting long-term rentals to short-term rentals - many of those will either get locked back up in the long-term rental pool or go into foreclosure

You also have the case that like stock prices employee hiring is often based on projections for anticipated need in a high-growth business - it's such a friction point, you are trying to stay ahead of the curve to build the capacity to grow now and handle that growth 12 months from now

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

#414

Post by bluedino »

actaeon169 wrote: post #341
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?!

As I recall, COBRA is pretty expensive.

They wanted like $1400/month for family coverage when I left my last job. I rolled the dice and went without it. It's available retroactively so if you need it later you can sign up for it.

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

#415

Post by llamataboot »

afjl wrote: post #406
r00fus wrote: post #373

Earlier quoted context omitted.

> 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…

I think it's highly unlikely...but I'd be very happy to be wrong, too. These highly-leveraged "new" companies and individuals make up only a portion of AirBnB-rented homes, which themselves are only a small portion of the entire housing market. There was a very recent interview or article with AirBnB's CEO where he (I'm sure he was fudging the numbers a bit) said only 1/3 of AirBNB homes are actually owned by these k…

1/3 is not a small number in this equation though!

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

#416

Post by sokoloff »

PascLeRasc wrote: post #219
airstrike wrote: post #37

Earlier quoted context omitted.

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

Dumb question here, I don't really understand what an option is in this context - can you just think of it as a call with a expiration of the vesting date and strike price at whatever they set? So they're giving you calls, with a $0 premium?

Not a dumb Q at all.

It's a call option, with no premium paid, a strike price specified [typically the last 409A valuation or other better proxy of current value], subject to vesting [cannot exercise before this date], but with an expiration some number of years into the future (typically 10 years from the date of the grant).

So you had it basically correct, except they don't expire at the vesting date.

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

#417

Post by moneywoes »

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…

The number of available suites spiked in Vancouver after this announcement.

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

#418

Post by julesqs »

pb7 wrote: post #226
julesqs wrote: post #210

Earlier quoted context omitted.

oh I might be confused about the COBRA situation actually. I can't tell if Airbnb is actually paying for COBRA. aside from that, assuming that non-engineers get paid better at Airbnb than elsewhere is a big assumption.

Will agree on the point regarding non-engineers. I would bet all else being equal they do, but will not fight over it as it's just an educated guess. With regards to COBRA, the premiums are certainly covered by AirBnb as COBRA is available to employees for 18 months by default and 36 months in California where AirBnb is headquartered.

right right, it was confusing to me that they mentioned COBRA but it does sound like Airbnb is paying, which is good.

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

#419

Post by chrischen »

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…

Even if we "open up" the virus won't be gone and society will have to function in a cautious state to mitigate the spread of the virus still. Lockdown was simply the most extreme portion, but the rest of the mitigation efforts will still have to continue at least until a vaccine is available. This means the economy is not going to return to normal for a long time.

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

#420

Post by beagle3 »

tjs8rj wrote: post #352
beagle3 wrote: post #275

Earlier quoted context omitted.

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.

There are no free lunches. But do note that this is also factored in into AirBNB's/Google/FB/IBMs/Microsoft's compensation as well; They could have paid everyone more and let them save for themselves, but -- like healthcare -- factor it into the "employer's cost" of which "visible" salary+RSU+ISO+bonus is only a part (70-90% depending on many factors).

The main difference is that in the US it is optional, so only the well-to-do employers and only at good-enough-time do it -- so the expected costs are weighted by the probability they will do them (say, 30% - I'm sure they have a good idea) -- and they can bail out at the last second if conditions are unfavorable for them to do that.

In Europe the systems mostly mandate it. The difference is more striking with respect to pensions paid on retirement - they are "optional" for the employer in the sense that they could (and are) discharged in bankruptcy, meaning that after 40 years of employment, one bankruptcy event (we'll see many after the lockdown) is all it takes to deny those payments.

There are no free lunches, indeed - the cost of higher US salaries are unpredictable (and often unfavorable) future cash flows for employees -- and only in some industries are the salaries high enough to actually allow the employees to prepare for that.

edit: I've heard someone describe these forcefully-ensured severance and retirement funds as "denying one the ability to steal from their future selves". I think that's an apt description of what it is.

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