CEO Notes: Brian Chesky, Airbnb

Background: Given the recent global health crisis, Airbnb’s business model is being challenged and were forced to reduce their workforce by 25%. This is the letter that CEO Brian Chesky shared with Airbnb employees that articulate the company’s plans for both team members staying on and those being let go. 


 

Earlier today, Airbnb Co-Founder and CEO Brian Chesky sent the following note to Airbnb employees.

This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news. 

When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce. For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb. I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next. 

Let me start with how we arrived at this decision. We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019. In response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb. 

While these actions were necessary, it became clear that we would have to go further when we faced two hard truths:

  1. We don’t know exactly when travel will return. 
  2. When travel does return, it will look different. 

While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy. 

Out of our 7,500 Airbnb employees, nearly 1,900 teammates will have to leave Airbnb, comprising around 25% of our company. Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business. 

A more focused business 

Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences. 

This means that we will need to reduce our investment in activities that do not directly support the core of our host community. We are pausing our efforts in Transportation and Airbnb Studios, and we have to scale back our investments in Hotels and Lux. 

These decisions are not a reflection of the work from people on these teams, and it does not mean everyone on these teams will be leaving us. Additionally, teams across all of Airbnb will be impacted. Many teams will be reduced in size based on how well they map to where Airbnb is headed.

How we approached reductions 

It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:

  • Map all reductions to our future business strategy and the capabilities we will need.
  • Do as much as we can for those who are impacted. 
  • Be unwavering in our commitment to diversity. 
  • Optimize for 1:1 communication for those impacted. 
  • Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse. 

I have done my best to stay true to these principles.    

Process for making reductions 

Our process started with creating a more focused business strategy built on a sustainable cost model. We assessed how each team mapped to our new strategy, and we determined the size and shape of each team going forward. We then did a comprehensive review of every team member and made decisions based on critical skills, and how well those skills matched our future business needs. 

The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. 

To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way. 

Severance

Employees in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb. Tenure will be rounded to the nearest year. For example, if someone has been at Airbnb for 3 years and 7 months, they will get an additional 4 weeks of salary, or 18 weeks of total pay. Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices. 

Equity

We are dropping the one-year cliff on equity for everyone we’ve hired in the past year so that everyone departing, regardless of how long they have been here, is a shareholder. Additionally, everyone leaving is eligible for the May 25 vesting date. 

Healthcare

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. 

Job support

Our goal is to connect our teammates leaving Airbnb with new job opportunities. Here are five ways we can help:

  • Alumni Talent Directory — We will be launching a public-facing website to help teammates leaving find new jobs. Departing employees can opt-in to have profiles, resumes, and work samples accessible to potential employers. 
  • Alumni Placement Team — For the remainder of 2020, a significant portion of Airbnb Recruiting will become an Alumni Placement Team. Recruiters that are staying with Airbnb will provide support to departing employees to help them find their next job.
  • RiseSmart — We are offering four months of career services through RiseSmart, a company that specializes in career transition and job placement services. 
  • Employee Offered Alumni Support — We are encouraging all remaining employees to opt-in to a program to assist departing teammates find their next role.
  • Laptops — A computer is an important tool to find new work, so we are allowing everyone leaving to keep their Apple laptops. 

Here is what will happen next

I want to provide clarity to all of you as soon as possible. We have employees in 24 countries, and the time it will take to provide clarity will vary based on local laws and practices. Some countries require notifications about employment to be received in a very specific way. While our process may differ by country, we have tried to be thoughtful in planning for every employee. 

In the US and Canada, I can provide immediate clarity. Within the next few hours, those of you leaving Airbnb will receive a calendar invite to a departure meeting with a senior leader in your department. It was important to us that wherever we legally could, people were informed in a personal, 1:1 conversation. The final working day for departing employees based in the US and Canada will be Monday, May 11. We felt Monday would give people time to begin taking next steps and say goodbye — we understand and respect how important this is.

Some employees who are staying will have a new role, and will receive a meeting invite with the subject “New Role” to learn more about it. For those of you in the US and Canada who are staying on the Airbnb team, you will not receive a calendar invite.

At 6pm pacific time, I will host a world@ meeting for our Asia-Pacific teams. At 12am pacific time, I will host a world@ meeting for our Europe and Middle East teams. Following each of these meetings, we’ll proceed with next steps in each country based on local practices.

I’ve asked all Airbnb leaders to wait to bring their teams together until the end of this week out of respect to our teammates being impacted. I want to give everyone the next few days to process this, and I’ll host a CEO Q&A again this Thursday at 4pm pacific time.

Some final words 

As I have learned these past eight weeks, a crisis brings you clarity about what is truly important. Though we have been through a whirlwind, some things are more clear to me than ever before.

First, I am thankful for everyone here at Airbnb. Throughout this harrowing experience, I have been inspired by all of you. Even in the worst of circumstances, I’ve seen the very best of us. The world needs human connection now more than ever, and I know that Airbnb will rise to the occasion. I believe this because I believe in you. 

Second, I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, “Travel like a human.” The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.  

To those of you staying, 

One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story. I am confident their work will live on, just like this mission will live on.

To those leaving Airbnb, 

I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb…that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.

Brian

CEO Notes: Jeff Weiner, LinkedIn

Jeff Weiner’s last note to LinkedIn employees entitled “I am because we are”

After 11 ½ years, today marks my last day as the CEO of LinkedIn. The world has changed dramatically since I first announced my intention to step down on February 5th. Having worked closely with Ryan Roslansky, our next CEO, and LinkedIn’s executive team over the last several months in preparation for the transition, I am more confident than ever in their ability to successfully lead the company going forward and grateful for the strong foundation Microsoft continues to provide. Though I won’t be going far in my next play as Executive Chairman, I did want to take this occasion to thank the team and our members for everything you’ve done to make LinkedIn the company it is today, and for making this the greatest professional experience of my life. Words can’t begin to express what you’ve meant to me and how you’ve changed my life for the better, but I thought I’d try to capture it through a recent experience.

For all the incredibly thoughtful and heartfelt ways people wished me farewell, I never would have guessed I’d become most emotional while watching several members of our team perform “Sweet Caroline” via video:

Yes, that “Sweet Caroline” — the same feel-good, sing-along anthem that has become my go-to karaoke staple.

Reflecting on it afterwards, I attributed my “there must be dust flying around my home office” reaction to two things: First, how the performers in the video wonderfully encapsulated the truly amazing people I’ve had the privilege to work with over the last 11+ years, noteworthy for their world-class talent, and even more so for the size of their hearts. Second, a brief moment in the video depicting me at a Global Sales Kick-off several years ago, leading a sing-along with our sales team. Why, I wondered, would such a fun, upbeat moment then elicit such an emotional response now?

It’s been said that we don’t truly understand the value of a moment until it becomes a memory. I learned how true that statement was over the last several weeks. In emails, posts, texts, event chats, and numerous meetings, my colleagues have given me the most wonderful farewell gift imaginable: memories of our time together. Those memories have been built around the world in ways big and small: from extemporaneous hallway exchanges to thousands of scheduled 1:1s, team meetings, and all-hands; they’ve come from personal interactions, like enquiring about a family member or checking in on someone’s health; and they’ve been built in larger than life moments, like the IPO, and meetings with heads of state. Each time someone emailed me, or messaged me with one of their stories, it brought me back to that precise moment in time as if I were experiencing it all over again — just like the sing-along highlight in the video.

Over the last few days, it finally occurred to me that as those moments unfolded over my tenure as CEO, I didn’t fully appreciate their significance. While in those moments, I felt like I was just doing my job, or being myself, or treating people the way I would expect to be treated, day after day, and year after year. However, reliving those memories again through the perspective of the people who created them with me, and hearing how meaningful those interactions were to them, a different picture began to emerge. It was almost as if each moment were an independent shard of glass, distinct in its color and shape, but when viewed in the aggregate, those shards became a beautiful mosaic, reflecting something far bigger than my experience at LinkedIn.

Similarly, I have been blessed over the years to be on the receiving end of countless notes of gratitude that our members have shared, either publicly or privately, describing the way in which LinkedIn has changed their lives for the better: the doors opened, the jobs found, the companies started, the skills gained, the relationships forged and myriad other examples. While each individual member story inspired and fueled us to do even more towards the realization of LinkedIn’s mission and vision, it’s only now that I appreciate how they too were an integral part of the mosaic.

It seems almost impossible to find the right words to fully describe my experience at LinkedIn — the thousands upon thousands of moments, people and learnings that comprised my true dream job. The most appropriate word I can think of is one that’s always held special meaning for me. It’s a Bantu word, “ubuntu,” that loosely defined means “humanity” or the way in which all of us are connected. A more literal translation is “I am because we are.” It’s a powerful concept and very fitting of my time with the team at LinkedIn and our 690M members, developing a community to create economic opportunity for every member of the global workforce. I can’t think of a better way to describe my extraordinary journey with all of you over the last 11+ years: I am because we are. Those were among the last words I said at my final all-hands and they seem equally relevant here among the last words I’ll write as CEO: I am because we are.

From the bottom of my heart, thank you for everything.

The future of retail banking

There was a time, not too long ago, when we used to write the amount we would like to transfer to another party on slips of paper. The other party will take the slip to their local bank branch, usually found on the corner of a street, to have it deposited and thus, complete the transfer of funds. The slips of paper were called cheques (or checks if you’re American).

While cheques are still being used, the introduction of easier ways of remitting funds such as e-transfers will eventually see them go the way of the Dodo. And as we’re in the midst of a banking transformation, what does the future hold for retail banking? How will our children and our children’s children be conducting their financial activity?

Digital-only banks are a start but not the end

Within the media, there is great hype about digital-only banks with no retail presence. In theory, it is a great idea with substantial cost savings from not having to invest in real estate and branch personnel. There is also the benefit of having a 1 to 1 connection with your client base through mobile devices. In practice, it’s not a bad idea either albeit many technical assumptions need to be made. Where digital-only banks excel is what I call “weekly wealth”. It’s the day-to-day transactional financial servicing that digital-only banks do things so much more efficiently.

Where it all falls down today for digital-only banks and where traditional banks are still trying to figure out is “wise wealth”.

Financial advice is the next battleground

We’ve seen the emergence of robo-advisors, which for all their big promise, offers safe returns. If you’re looking for a standard, well balanced asset mix, that should be fine. If you’re looking to be more in control, then you either need to learn how to build portfolios and self-serve or be wealthy to afford private banking services.

This is where fintech can fill the void. There could be 2 approaches to closing the gap between self directed investing and private banking: Technology that helps financial advisors serve more clients and thus capping management fees or AI-driven financial advisors to supplement folks who are into self-directed investments. In future posts, I’ll be exploring these 2 approaches in greater detail.