Barely two months into the pandemic, Airbnb laid off a quarter of its employees—1,900 people. The company, which ended the year with an IPO, had lost roughly 80% of its business to the pandemic, CEO Brian Chesky tells Fortune in an interview on Wednesday.
“We didn’t know when [the business] was coming back,” he says.
Layoffs have never not been awful. Maybe they hit different because it shatters the corporate illusion that work is like a family; because when it comes time to cut costs, work is little more than dollar signs and decimal points.
Even Chesky, who with co-founders Nathan Blecharczyk and Joe Gebbia, built Airbnb on the idea of belonging and a sense of intentional morality that often contrasts with other Silicon Valley darlings, acknowledged the disconnect.
“How does a company whose mission is centered around belonging have to tell thousands of people they can’t be at the company anymore?” he said during a May 2020 appearance on the podcast Out of the Crisis. “It was a very, very difficult thing to face.”
The recent deluge of layoffs in the tech world have hammered home just how innately callus—verging, in some instances, on cruel—layoffs can be. In November alone, tech companies have announced 31,200 job cuts, according to Challenger, Gray & Christmas, a firm that advises employers on layoffs.
Snap, Coinbase, Robinhood, and Tesla, among others, have all announced layoffs in recent months. Amazon is also planning to lay off thousands of workers. None, however, have garnered the attention that befell Meta more recently, and to an even greater extent, Twitter. Both have endured criticism for either the seeming insensitive nature of the layoffs (the case for Twitter) or the careless lead up to the layoffs (the case for Meta).
Both might have been better off taking a page out of Airbnb’s layoff book.
Musk lacked compassion
Airbnb was lauded for how the layoffs were handled in 2020. A memo Chesky wrote, in which he expressed love for his employees, was considered compassionate, empathetic, and a lesson in leadership and communication.
“We did it in a kind of novel way because I did a couple of things: The first thing I did is I wrote this letter that was very transparent. We went step by step about what happened; how we got here,” Chesky says, democratically noting recent tech layoffs have ranged across the spectrum of good to bad.
Experts say it’s best to cut deep and cut once, to show empathy, offer support, and be open and transparent about the company’s direction. A generous severance doesn’t hurt either.
In addition to offering a substantial severance package and health care benefits, Chesky seemed most proud of the alumni directory that allowed laid off employees the opportunity to hear from recruiters at other companies looking to hire through Airbnb and field offers for new jobs.
On the other end of the spectrum, Musk has been warring with the remaining half of employees he didn’t lay off with little more than an unsigned email dropped in inboxes after the workday (others figured out they were out of a job when they couldn’t log on to their company email or messaging system), drawing a relatively harsh line on increasing productivity and return to office.
A senior Twitter engineer was apparently fired via tweet by Elon Musk after the two tussled briefly on the app about Twitter on Android.
“With layoffs you should just make sure you do more than what’s expected, you’re incredibly compassionate, and that you allow people to leave the company with dignity,” Chesky says.
Zuckerberg was ‘overly optimistic’
On another spectrum, Chesky also says “companies were probably overly optimistic over the last two years,” a mistake Meta CEO Mark Zuckerberg copped to when he announced roughly 11,000 layoffs earlier this month.
“They overhired because they thought what happened the last two years was gonna happen forever,” Chesky says. “There was a huge shift from retail and physical to digital. But I think as people spent more and more time on screens, they said, ‘this can’t be my entire life, I want to get out of the house.’”
Airbnb has remained relatively lean for its size, Chesky says. The company employs somewhere around 6,000 people, and was planning to only increase the staff some 7% this year before the economy took a turn.
“Sometimes the fastest way to grow is to have really small teams that can move really quickly and nimbly,” Chesky says. “We don’t have to make many more changes, the business is going really well. If anything, we’re not stepping on the brakes, we’re really probably stepping on the gas.”
Our new weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s executives—and how they can best navigate those challenges. Subscribe here.