COVID-19 destroys 80% of bookings; executes history's hardest rebuild
Context: In March 2020, the global COVID-19 pandemic broke out; travel bans caused Airbnb bookings to collapse within weeks, forcing postponement of the planned IPO and plunging the company into an existential crisis.
Decision: Precisely cut 25% (1,900 employees), publicly committed to generous severance, extended health insurance, and personal device retention for departing employees; Chesky personally wrote a public letter explaining the layoffs and compensation.
Reasoning: Showing respect for people during the hardest moments is the ultimate test of company values; transparent public communication builds long-term trust among both departing and remaining employees.
Outcome: The layoff letter was widely shared, becoming the benchmark for tech industry layoff communications; in December 2020, Airbnb successfully IPO'd at a $47B valuation, far exceeding most analyst expectations.
Lesson: How you treat people leaving during the hardest moments is equally important—and perhaps more revealing—as how you treat those who stay during success.
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