The 1,900 workers that online booking platform Airbnb said Tuesday it was terminating will exit the company with a very generous separation pay.
Employees in the U.S. who will be rendered jobless, comprising a quarter of Airbnb's headcount, will earn 14 weeks of base pay an extra week for every year they have worked at the company, chief executive officer Brian Chesky said in a letter to the staff.
The employees will also get 12 months of health insurance paid for by Airbnb via Cobra. The company will cover the health care premiums for workers outside the U.S. through the end of the year.
Because of the pandemic the organization is struggling with plunging transportation, it also said it will start reducing or abandon new programs, such as investments in hotels and luxury resorts and flights. The company is girding for this year's sales to fall by half or worse.
The crisis has sharpened the firm's attention on "getting back to our roots, back to the basics, to what's really unique about Airbnb - everyday folks sharing their homes and offering experiences," Chesky said in an email that Airbnb released to workers.
Chesky described the ongoing global health crisis as "the worst crisis in our lives." He said to staff they don't know exactly "hen travel is going to return. " It will look different when travel does return."
Airbnb has workers in 24 countries. It is based out of San Francisco and its European headquarter is in Dublin, where around 500 people are working.
Some of the worst job losses are likely to occur in newer business areas such as Airbnb "Luxe" , which provides what the company describes as upmarket homes and dedicated travel designers.
Airbnb is among many companies in the travel industry that has been battered by the pandemic. In March 2017, it had a market value of $31 billion. By end of April this year -- it was worth $18 billion.
Nonetheless, Airbnb's decision to give all workers 14 weeks of regular pay is quite unusual, regardless of how many years they have worked for the company.
According to a survey released in 2019 of 10,000 job seekers conducted by Chicago-based outplacement and career-transitioning company Challenger, Gray and Christmas, employers offered an average of 1.1 weeks of severance per year of service, with an average payout of 19.4 weeks of overall separation pay.
The separation pay is usually tied to years of work, Challenger said. The average severance pay within the hospitality and travel sector was around 2 weeks pay per year of service and 19 weeks overall.
