Lessons in Leadership During COVID-19: Airbnb

Why Airbnb’s communication of COVID-19 layoffs is an example of good leadership

No industry has been immune to the effects of COVID-19, but travel has been hit particularly hard. Airbnb announced in May that it would be laying off 1,900 employees, equivalent to 25% of its workforce.

While the circumstances are not unique to Airbnb, how CEO Brian Chesky handled the layoffs should serve as a lesson to leaders on managing a crisis.

What Airbnb got right

On May 5, Chesky sent a note to Airbnb employees informing everyone of the upcoming changes. Here are some of the key lessons we can pull from this letter:

1. Honestly describing the current situation

Chesky announces in the second sentence of the letter that, “we are reducing the size of the Airbnb workforce.” He then explains that Airbnb’s projected 2020 revenue is less than half of what it was in 2019. Chesky also states that the company has worked to raise significant capital and cut costs, where possible, to make ends meet.

This level of honesty resonates throughout the letter—and it’s tremendously valuable at a time when so much is uncertain. It also serves to ensure employees that layoffs were the last possible option for the company after trying several other avenues. 

2. Being transparent about the decision

Often with companies of this size, employees are not privy to the reasons for executive decisions. Chesky takes the opposite approach and goes into detail about Airbnb’s guiding principles that led them to this point. He says the company painstakingly evaluated each team and individual to determine where cuts needed to be made, then prioritized transparency and one-on-one communication for those impacted. By revealing how the decision was made, those being let go and those staying know why they are in either group.

3. Putting employees first

Losing income is bad enough, but losing access to benefits such as healthcare and paid sick leave in the middle of a pandemic is just as worrisome. In a show of humanity, Airbnb offered the following to those being let go:

• 14 weeks of base pay plus one additional week for every year at the company

• Everyone, regardless of tenure, is a shareholder in Airbnb

• 12 months of health insurance costs through COBRA in the U.S., and coverage of costs through the end of 2020 abroad

• Creation of an alumni talent directory and placement team to assist those leaving find other jobs

Airbnb offered support at a critical time, so former employees could maintain a sense of security as they move on from the company.

4. Clearly communicating next steps

Chesky's letter left as little room as possible for confusion or questions. He clearly communicated the next steps, so everyone knew what to expect. They included a procedure for how the layoffs would go, what the final workday would be, and how those remaining could expect a role change. He also scheduled three meetings with the team to talk to them face-to-face and answer their questions.

Strong leaders communicate bad news with clarity, minimizing additional hurt brought on by confusion and frustration. By clearly stating the next steps, Chesky presented a clear, thoughtful, and well-organized plan.

5. Being compassionate

The letter closes with a heartfelt apology: “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.” This simple paragraph expresses humility and valuable recognition for many leaving employees.

Being laid off is usually accompanied by a sense of failure and inadequacy. Airbnb took every step to ensure employees knew that they were valued, and their work was recognized—the separation was simply a financial necessity.

Leading in a crisis

As the COVID-19 pandemic continues, leadership executives can look to other companies for inspiration on how to deal with difficult circumstances. But transparency, clarity, and compassion are always top priorities when leading in a crisis.

Carrington Legal Search is celebrating 20 years in business: we were in the trenches with our clients during 9/11 and 2008. We partner with our clients to identify leaders and mission-critical talent to shore up and grow companies even during the most challenging times. We are here for you! To make our nationwide network work for you, get in touch at 512-627-7467 or email carrie@carringtonlegal.com.