Airbnb is freezing marketing spending and slowing hiring as losses reportedly reach hundreds of millions of dollars
- Airbnb has halted most teams to freeze hiring for the foreseeable future, according to a report in The Information on Friday.
- Technical and essential roles are still open and moving through the process on a case by case basis, a source close to the company told Business Insider. An independent analysis of open roles showed that technical and contingent roles dropped sharply starting in January, and have continued to fall.
- Airbnb is among other startups struggling with an extreme decrease in revenue as people halt travel during the nation-wide coronavirus outbreak and city-specific orders to shelter in place.
- Airbnb, which was originally targeting a 2020 public offering, is particularly hard hit as more people cancel trips and request refunds.
- CNBC reported Thursday that the home-sharing giant was in talks with investors to raise additional funding in lieu of a public offering.
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Airbnb is pumping the brakes on new hires and freezing its marketing spending as its losses from the coronavirus fallout mount, according to a report Friday from The Information.The home-sharing startup gave teams a directive to halt or severely limit most hiring late last week, and confirmed the changes in a company all-hands on Thursday, according to the report, which cites an anonymous source. Advertisement
The changes were implemented earlier this month as the startup, last valued at $31 billion, began assessing the damage caused by coronavirus-related cancellations. Airbnb decided to offer its customers in affected areas a full refund as more states implemented bans on travel and city-wide shelter-in-place orders became more common.
Airbnb, which once stood out among the crop of sharing economy startups for being profitable, is now losing hundreds of millions of dollars, The Information reported.Technical and essential roles at Airbnb are still open and moving through the process on a case-by-case basis, a source close to the company told Business Insider.
An independent analysis of open job listings at Airbnb by data analytics firm thinknum showed that technical and contingent roles dropped sharply starting in January, and have continued to fall. Product and marketing were among the hardest hit, but it was not clear if the roles were filled by candidates already in the hiring pipeline or whether the roles were removed entirely.
Public listing plans in questionThe travel industry has been among the hardest hit as markets fell, with airlines and other tech companies like Uber and Lyft taking a brunt of the selloffs. In conversations with Business Insider, multiple venture capital investors speculated that Airbnb, Uber, and Lyft may not make it out of a pending recession at all. In September, Airbnb published a blog post signaling its intention to go public sometime in 2020, and many believed it would do so via a direct listing because of its ample cash reserves and name-brand recognition. Companies that opt to go public via a direct listing don't raise money, as is the case for a traditional IPO, but employees and company insiders are able to sell their stock on the open market on the first day of trading.Advertisement
"I think it's definitely going to impact timing," Torch Capital founder and managing partner Jon Keidan told Business Insider. "Everything will be pushed back. You just can't do that with uncertainty, and Airbnb is going to be heavily, heavily impacted. It will be tough. There will be a big delay at the least, and they might rethink strategy entirely."
Airbnb now joins Uber in implementing a hiring freeze, although rumors of freezes abound on Silicon Valley anonymous chat apps and message boards. Other tech giants like Google and Amazon have halted employee reviews and delayed promotions in an attempt to get a handle on the whiplash in public markets.For Airbnb, the move comes on the heels of a CNBC report that the home-sharing startup was taking meetings with private investors to secure emergency funding in lieu of going public. Multiple investors who spoke with Business Insider claimed the formerly planned direct listing was off the table now that the company needed to raise funds, and it now looks like even an IPO could be delayed in favor of additional private financing.Advertisement
Airbnb has raised $4.4 billion in venture capital since it was founded in 2008 and is privately valued at $31 billion, according to Pitchbook data. An Airbnb spokesman declined to confirm the details of this report, but said that the startup "is resilient and built to withstand tough times and we're doing all we can to strengthen our community and our company."
Do you work at Airbnb and want to share your story? Contact this reporter via encrypted messaging app Signal at +1 (331) 625-2555 using a nonwork phone, email at email@example.com, or Twitter DM at @megan_hernbroth.Axel Springer, Insider Inc.'s parent company, is an investor in Airbnb.Advertisement
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