Airbnb was like a family...until the pandemic

Probably behind a paywall for most of you. Partial excerpts posted from a NYT article.

Inside the San Francisco company’s airy, plant-filled offices, the posivibes were also plentiful. Employees surprised one another by raising their arms to form celebratory human tunnels, held dog “pawties” in conference rooms designed to look like actual Airbnb listings and were serenaded on their birthdays by the company’s a cappella group, Airbnbeats. New employees, who were screened for empathy in job interviews, were welcomed “home” and told: “You belong here.”

So in March, when the coronavirus hurtled in, the rupturing of the “Airfam” was painful. Airbnb, which had been on track to go public this year, suddenly faced an avalanche of travel cancellations. Revenue evaporated. Weeks later, Mr. Chesky announced the layoffs and scaled back the company’s ambitions.

“Everything that kind of could go wrong did go wrong,” he said in an interview. “It felt like everything stopped working at the same time.”

From the outside, Airbnb’s commitment culture appeared intact. Mr. Chesky’s layoffs script, which was published on the company blog, got more than one million views and was praised as compassionate, empathetic and a “lesson in leadership.” At a question-and-answer session about the job cuts later, Mr. Chesky and his co-founders offered a standing ovation to the employees they had let go. Clapping and heart emojis from audience members filled the screen.

But more than a dozen current and former Airbnb employees, most of whom declined to be identified because they had signed nondisparagement agreements with the company, said in interviews that they had experienced a sudden disillusionment when the carefully crafted corporate idealism cracked.

Kaspian Clark, 38, who worked in customer support in Portland, Ore., for around two years, said he had fully bought into Airbnb’s mission and felt denial and grief when he was let go.

Airbnb was built not on a genius technological innovation or a meticulous business school PowerPoint, but on the idea that people might trust one another enough to stay in strangers’ houses. Basically, the goodness of humanity.

His philosophy crystallized in 2018 when he presented a plan for something called “stakeholder” capitalism. In contrast to Wall Street’s focus on quarterly financial reports and daily stock moves, Mr. Chesky aspired to a capitalism that had an “infinite time horizon” and was good for society.

That philosophy imbued many areas of work for Airbnb employees. Part of their performance reviews, for instance, were based on how well they embodied the start-up’s core values, three former employees said. “Embrace the adventure” was sometimes used to justify difficult situations, they said, and “champion the mission” was code for putting a positive spin on things. (A company spokesman disputed the characterization.)

Airbnb’s rental listings grew from 2,500 in 2009 to seven million this year. The company landed funding from top venture firms including Andreessen Horowitz, Founders Fund and Sequoia Capital. Its valuation, which topped $2 billion in 2012, skyrocketed to $31 billion by 2017. An initial public offering this year was set to make its executives, investors and employees rich.

There were stumbles. When guests wanted out of nonrefundable bookings because the pandemic had forced them to change their plans, Airbnb changed its policy to allow refunds. But the move outraged the company’s rental operators, who relied on the income. Mr. Chesky eventually apologized for how Airbnb had communicated the decision.

“Was everything done perfectly? No,” said Alfred Lin, an Airbnb board member and investor at Sequoia Capital. “It was about speed and being directionally right.”

Airbnb soon cut $800 million in marketing costs, dropped bonuses and halved executive pay for six months. It also ended contracts with roughly 490 full-time freelancers. With cancellations pouring in and call centers closed because of the virus, Airbnb directed employees across the company, including its recruiters, who had frozen hiring, to assist customers. The backlog took weeks to get through.

In April, the company raised $1 billion in emergency funding, followed by another $1 billion in debt.

Then came the May 5 layoffs. To blunt the shock, Airbnb’s severance packages included three months of salary and a year of health benefits, which was more generous than many other start-ups doing layoffs.

Mr. Chesky has since described a “second founding,” in which Airbnb will be more focused on its core home rental business. It will look different, he said, with fewer customers booking international travel, less flocking to crowded cities, more local trips and more long-term stays.

See more here:

1 Like

In the early aughts, I was working in Santa Monica CA surrounded by Dotcom startups; When things started to go bust, it was not unusual to see employees show up for work to find the doors locked; That was their notice that they were no longer employed, as those companies ceased operations. The difference here is that AirBNB is still afloat, so being “generous” is more PR speak.


Health insurance for a year as part of severance package? Sounds good to me.

Layoffs are wicked for causing hard feelings and lack of trust toward the company by both those laid-off & those surviving. Also I will bet the remaining employees are being help accountable for higher productivity standards so being paid the same to do more.

I’m not surprised the work lost the joy. I hate that it happened.

Yes. And I am sure that those severance packages came with quite the lengthy list of provisions : confidentiality, non-disparagement, restrictive covenant in their next job as well as lots of releases of claims. I’m not saying that it isn’t a good package, but I think it was mostly about controlling all of those released employees - primarily a wise legal move.

1 Like

Posivibes? What a terrible word. :roll_eyes:

1 Like

The warm family feel that was part of being a host early on ( we started in 2012) disappeared when the growth in listing skyrocketed. It hasn’t been a “family” for a long time.

1 Like

Full-time freelancers would be in violation of California labor laws:

1 Like

Make no mistake. When you are speaking of companies that are public or want to go public:

  • When a company is in a period with a high rate of growth, employees are their greatest asset.
  • When a company is a period of stagnation or decline, employees are their greatest liability.