[HN Gopher] Citing revenue declines, Airbnb cuts 25% of workforce
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Citing revenue declines, Airbnb cuts 25% of workforce
Author : dancric
Score : 489 points
Date : 2020-05-05 19:15 UTC (3 hours ago)
(HTM) web link (techcrunch.com)
(TXT) w3m dump (techcrunch.com)
| nightshadetrie wrote:
| The most famous unicorn bleeds today.
| drwl wrote:
| A lot of tech is getting hit, it seems like Airbnb is more in
| the spotlight
| remote_phone wrote:
| FANG is surviving, if not thriving. A lot of famous companies
| will disappear in the next 9 months. This feels a lot like
| the dotcom bust to me.
| dillonmckay wrote:
| All global companies, too.
| DamnYuppie wrote:
| Why do people consider AirBnB tech? They are a services
| company with a website connecting external parties. This
| isn't hard tech, this is marketing.
|
| Edit: It seems people are under the impression that because
| you have lots of technology that is required to run your
| company you are a technology company. I don't believe that to
| be true in this day and age, tire distributors probably have
| more technology requirements then AirBnB does but we don't
| consider them tech companies. By the same token I wouldn't
| consider Expedia/Travelocity etc to be tech companies either
| the use tech to provide a service.
| KoftaBob wrote:
| Their core business is a marketplace connecting travelers
| to hosts and their homes/rooms. That marketplace is
| software. If you're a company selling a service that is
| completely software based, are you not a tech company?
|
| By the definition you seem to be using, the only companies
| that can be considered tech are enterprise SaaS.
| Barrin92 wrote:
| The defining feature of tech is marginal cost of
| production close to zero at scale . Meaning, as you grow
| your business you increasingly automate away human
| labour. That's why Instagram was worth billions with 13
| employees.
|
| You're not a technology company just because you rely on
| software. Walmart makes software too, much more of it
| than airbnb actually. You're a technology company if you
| automate away human labour. This doesn't really seem to
| be the case for most of these 'marketplace' companies
| which is reflected in their margins. They just have to
| keep adding more labour as they expand.
| decafninja wrote:
| My personal take on what defines a "tech company" is a
| company that understands and respects that tech drives its
| business and thus treats its tech employees with respect.
|
| Almost every large company is tech driven these days. But
| in a lot of them, tech is considered more of a necessary
| evil "cost center". The tech employees are treated as
| second class citizens compared to the marketers,
| salespeople, traders, etc. who are the "profit center".
|
| A big investment bank (disclosure: I work at one) arguably
| has more tech running through its veins these days than
| say, Airbnb. But I would firmly classify Airbnb as a "tech
| company" per the above definition, and the bank as "not a
| tech company".
| keiferski wrote:
| I'd probably put them in the same category as Etsy: tech-
| enabled marketplaces.
| GuiA wrote:
| Shortest answer: because they went through YC.
| [deleted]
| [deleted]
| gaukes wrote:
| Acquisition target IMO. While AirBnb bleeds, the FANGs continue
| to pile up cash.
|
| Google, Facebook, and Apple all have enough cash to buy several
| AirBnbs rn.
| vkou wrote:
| Yes, but instead of buying several AirBnBs, they could
| instead buy dozens of smaller startups that are not operating
| in the hospitality industry - which is going to recover much
| slower than most forms of B2B or B2C.
| gaukes wrote:
| Those industries would also be hurting less which means a
| smaller discount.
|
| Meanwhile, long-term prospects for AirBnb have not changed.
| Disease existed before COVID and will exist after COVID.
| hn_throwaway_99 wrote:
| > Meanwhile, long-term prospects for AirBnb have not
| changed. Disease existed before COVID and will exist
| after COVID.
|
| Not sure I 100% agree with this. AirBnB's bread-and-
| butter was urban rentals. Even before Covid, there was
| huge backlash against AirBnB in a lot of those locales.
| Now, especially after you saw huge numbers of AirBnB's
| convert to long term rentals (really laying bare the
| nonsense of the "AirBnB doesn't take from long term
| rental stock" argument), I think you'll see tons of
| cities accelerate their plans to ban lots of short-term
| rentals in their current form, and these cities and
| society at large will become a lot more hostile to
| AirBnBs in residential neighborhoods.
| gaukes wrote:
| I agree that there is a general backlash against AirBnb
| in certain locales but this was a risk before COVID too.
| I don't see how COVID would compel cities to move FASTER
| to ban short-term rentals. During a time like this,
| aggressively cutting down a good business (for property
| owners) seems like a bad move in general.
|
| The conversion of short-term -> long-term is a side
| effect of reduce demand. Once demand picks back up,
| supply will return.
| rightbyte wrote:
| The mass tourism boom in the year prior to Covid19 might
| not be the new normal.
| vkou wrote:
| The industries may be hurting less, but they may be in
| need of funding, that has dried up, and is leaving
| otherwise reasonable businesses in a bind.
| three_seagrass wrote:
| Don't be fooled by the Q1 results that only cover a few weeks
| of the shutdown - FANGs are hurting too.
|
| 30 M unemployed and growing means no disposable income for
| consumer businesses, which in turn are shutting down and
| shrinking their spending on B2B services. The latter is
| delayed and won't be fully visible until Q3.
| filoleg wrote:
| >which in turn are shutting down and shrinking their
| spending on B2B services
|
| You are assuming the scenario where consumer division was
| making a lot of money. For a lot of very successful B2B
| businesses, their consumer division exists mostly to make
| small gains, while acting primarily as a getaway or
| advertisement for their B2B offerings.
|
| You would be surprised to find out how much more revenue
| (and profits) a company like Microsoft makes on their B2B
| offerings compared to the consumer ones.
| three_seagrass wrote:
| Right, and who do you think Microsoft's B2B customers
| serve and get their revenue from?
|
| Even those that are still B2B eventually need cash flows
| from consumer businesses. Hence the statement that we
| won't fully realize the losses until Q3. Less spending by
| consumers depresses all businesses, some sooner than
| others.
| bogomipz wrote:
| >"Airbnb will also provide 12 months of health insurance through
| COBRA in the United States, and health care coverage through 2020
| in the rest of the world."
|
| I was curious about this as COBRA is mandated by federal law in
| the US for companies with 20 employees or more[1]. However
| providing coverage and paying for that coverage are not
| necessarily the same thing. COBRA means you keep the same
| insurance plan the employer provided you but generally you
| personally are on the hook for a significant part of those
| premiums. And that premium payment is due every month. Does
| anyone have any insight into what the company is providing?
|
| [1] https://www.bizfilings.com/toolkit/research-topics/office-
| hr...
| sriram_sun wrote:
| A lot of people playing in the public markets should thank their
| lucky stars that Airbnb did not IPO a couple of years back!
| break_the_bank wrote:
| That is a nice way to look at it. It'd have been on my buy list
| if it were public.
| subsubzero wrote:
| I'm glad the employees got a generous severance package,
| hopefully ISO's was misreported and the employees received RSU's
| instead, as it would be a burden on the employee to have to come
| up with cash to exercise during such a time. Its important to
| remember that Lyft and Airbnb also Uber are all heavily tied to
| travel which isn't happening now due to covid. With states
| reopening and warmer weather, plus a drug that reduces the
| duration of covid-19(remdesivir) things will hopefully be getting
| better. If and when a second wave comes more drugs could surface
| that show efficacy against the virus so it won't be all doom and
| gloom.
| user5994461 wrote:
| Predicted that weeks ago. AirBnb is super bloated, they have a
| similar amount of employees as the other major travel groups but
| only serve a fraction of the products and customers
| https://thehftguy.com/2020/03/23/will-airbnb-go-bankrupt-and...
|
| Good to hear that they are giving a decent severance package.
| ryneandal wrote:
| > the company said that 1,900 employees will be laid off, or
| 25.3% of its 7,500 workers
|
| Thought I misread that the first time through. What did those
| 7,500 do?
| hn_throwaway_99 wrote:
| Ugh, to be honest I get tired whenever I see the "Why did
| company XYZ need so many people, they're just a
| website!"-type comments. While it is definitely possible
| AirBnB was bloated, it's not hard for me to imagine at all
| what all these people did.
|
| AirBnB is a relatively high-touch business, so I imagine a
| huge number of those people were in customer support/customer
| relations, both for travelers and for property owners. AirBnB
| also operates in a huge number of countries, and each of
| those countries need (a) marketers, (b) people with
| regulatory knowledge (often at a level much more granular
| than the country level - and to head off any 'but AirBnB
| ignores the regulations!' comments, while that may be true, I
| guarantee they still have people that know what they are),
| (c) again, customer service people knowledgeable with the
| local language and customs.
| projektfu wrote:
| It's a high-touch business but more and more that touch is
| someone to tell a traveler that the scammer that took their
| money gets to keep their money.
| ramraj07 wrote:
| While your points are valid, we can still consider the
| bloatedness hypothesis but just looking at the engineering
| team size.
|
| Uber was similarly accused of being bloated and it
| definitely was on just the engineering team - several
| thousands of engineers for what is definitely a complex app
| but not that complex really.
| winslow wrote:
| Yeah typically happens with each layoff. It's nice that
| when times are good companies are able to spread the
| workload more. It helps increase code quality and quality
| of life for everyone working there. Also part of current
| employee numbers is hiring to keep up with projected growth
| etc.
|
| If everything was so easy to build we should all quit our
| jobs and do our own single developer startup.
| ksj2114 wrote:
| I published an article on this actually:
| https://blog.acrossapp.com/what-do-all-those-tech-
| employees-...
| dangwu wrote:
| Tell us why you think 7,500 employees is too high, in order
| to implement, maintain, and grow an online lodging and
| experiences marketplace in 191 countries.
| user5994461 wrote:
| hotels.com managed just fine with only 500 employees in
| their headquarters.
| superworrier wrote:
| What? Expedia has over 20000 employees, and hotels.com is
| one of their largest units, and they no doubt benefit
| from shared stuff.
| dangwu wrote:
| Apples and oranges. Hotels.com is a middle-man. When you
| have a problem with your stay, you talk to the actual
| hotel, which has its own front desk, customer service,
| legal, engineering, business, marketing, blah blah blah,
| teams.
| kungato wrote:
| My family vacation house which we let got a visitor
| through hotels.com through expedia and we don't have
| anything you mentioned. My guess would be whatever
| something is called be it Hotels or AirBnB they are
| working with everyone in the business in some capacity
| danpalmer wrote:
| Same with AirBnB. I've never contacted AirBnB support,
| but typically have 2-3 interactions with the host every
| time I stay at an AirBnB property. AirBnB are just a
| middleman.
| user5994461 wrote:
| The hotel contact number you got on the website and the
| receipt goes to a central support run by hotels.com, it
| doesn't go to the actual hotel.
|
| The support can often sort our issues better than what
| you could do yourself. They're in a better position to
| pressure the hotel or rebook you somewhere else nearby.
| ThisIsTheWay wrote:
| Provide a source for that 500 headcount... Hotels.com
| lists 1100-1500 employees depending on where you look,
| and LinkedIn shows ~1600 employed by Hotels.com today.
|
| With that said, Hotels.com is owned by a multi-billion
| dollar conglomerate called Expedia, which employees ~24K
| people across multiple brands. AirBnB is operating on
| their own.
| user5994461 wrote:
| Worked there a few years ago. Should be double now since
| they've extended to and filled a new building.
|
| The whole group with Expedia was something around 15k if
| I recall well. It includes more than a hundred
| independent brands and products, plus a few massive white
| labels, covering an order of magnitude more languages and
| currencies than AirBnb. So better not compare the whole
| conglomerate to AirBnb (except as an evidence it's
| bloated).
|
| The last media reports put AirBnb at 12000 or 15000
| employees, but the article is mentioning a total
| workforce of 7500, so either the media were very off or a
| whole bunch of employees are not factored in. Either way
| it's a lot, no doubt the business can run with half of
| that.
| ThisIsTheWay wrote:
| Wikipedia lists ~12K employees at AirBnB, so I agree that
| some additional clarity would be needed to understand the
| discrepancy.
|
| If you compare the ratios of operating income vs
| headcount between the two, the companies are nearly
| identical based on the metrics available in Wikipedia
| today.
| user5994461 wrote:
| I don't see how you could do a comparison since neither
| of the company publish any metrics? They're not public
| and not required to publish any financial or operational
| information. Turns out it's not even possible to figure
| out how many employees they currently have. ^^
|
| Just one tip. Don't do the mistake of taking Expedia in
| place of hotels.com. Expedia is a large conglomerate of
| many companies that is not representative of just that
| one. It's like confusing the mobile related business of
| Samsung versus Samsung as a whole.
| dubcanada wrote:
| Not that this hasn't been talked about like 15 thousand
| times.
|
| AirBNB is a big company, and big companies have lots of
| employees.
| bvandewalle wrote:
| or would it rather be: Airbnb is a huge VC backed company.
| They need to grow 10x at all cost in order to justify their
| valuation?
| nateberkopec wrote:
| AirBnb was doing about $4 billion in revenue per year before
| the crash with 7,500 employees. That's about $500k revenue per
| employee, which is on the high end of tech industry standards.
| How is that bloated?
| sachdevap wrote:
| Is revenue per employee some sort of standard measure in the
| industry?
| booi wrote:
| In general yes but obviously nuanced. Gives you a sense of
| scalability
| user5994461 wrote:
| Well, it's a philosophical conundrum.
|
| If a business has enough money to hire more people
| (revenues per employee is proxy). It should do so as long
| as it can recoup the investment.
|
| If a business already has thousands of people sitting
| around doing nothing, should it continue to hire more?
|
| There are a near infinite amount of small optimizations
| and extensions in global businesses that can pay for
| themselves, so technically it should always hire... but
| should it really?
| jedberg wrote:
| It is now. It started when Facebook would make a really big
| deal about their productivity per employee as a way of
| showing the incredible efficiency of their technology.
|
| I worked at reddit at the time, and we laughed because ours
| was double Facebook's, despite the fact that we weren't
| even doing very well. But we also had very few people.
|
| So the calculation doesn't really work at very small
| numbers, and also doesn't account for expenses.
| julianeon wrote:
| There's been some talk about how reddit is seriously
| undervalued, and I'm leaning more towards believing it,
| now.
|
| I know when I'm looking for an authoritative answer to
| something I often append 'site:reddit.com' to my search -
| and I think younger generations are, if anything, moving
| more in that direction.
| kippinitreal wrote:
| Is that $4 billion in bookings or only their take? If it's
| the latter, then their "real" revenue per employee is much
| lower. For marketplaces it seems disingenuous when they use
| the top-line number for revenue given that they can only
| increase their rake so much.
| fapi1974 wrote:
| They are definitely doing right by their employees, which is
| commendable.
| fancyfish wrote:
| Agreed. Shoutout to AirBnB management who made the best of the
| tough situation and did the right thing.
| dorchadas wrote:
| I'll agree with that, even given how much I hate AirBnB as a
| company for what they've done to local housing in cities.
| They're at least doing the right thing here.
| jedberg wrote:
| The generous severance makes a lot of sense. Besides being the
| right thing to do, if the economy somehow does have a V shaped
| recovery, they may want to rehire a lot of these people.
|
| It's a lot easier to rehire someone who still likes you than to
| try and find new people.
| bbgferreira wrote:
| _In an effort to keep both the demand and supply sides of its
| marketplace healthy enough to survive hibernation, Airbnb has
| allowed users to cancel some reservations without penalty, and
| provided financial succor to its hosts._
|
| Unsure if this will ring true to most hosts. They were heavily
| penalized with full cancellations, while Airbnb issued vouchers.
|
| Airbnb will have to make a lot of effort to win hosts' trust
| back.
| hm8 wrote:
| I can only imagine how much it sucks to be laid off and what a
| difficult decision it must be for Airbnb executives.
|
| To me, the severance and exit benefits do seem to strike an
| employee friendly tone. Kudos to the leadership to striking a
| good balance on keeping the business alive and doing right by
| their people.
| canada_dry wrote:
| > imagine how much it sucks to be laid off
|
| Never a good time, but especially in this environment!
|
| I recall that airbnb workforce has become very marketing
| lopsided (vs. tech). Whereas tech folks generally have an
| easier time landing, I imagine the environment for the next
| 9-12mos being very bad for marketing/MBA folks.
| justaguyhere wrote:
| These are abnormal circumstances. I wonder if it is possible to
| delay the layoffs by cutting salaries - maybe instead of firing
| 5 out of 10 equally paid people, they can cut the salaries of
| all 10 people by half (or something like that).
|
| Any which way these are hard decisions :(
| pedrosorio wrote:
| Cutting salaries in half guarantees they lose all the top
| performers, and probably more than half, instead of the 5
| they pick. I don't believe that is the goal.
| tempsy wrote:
| Lyft cut salaries in addition to layoffs
| knd775 wrote:
| Certainly not by half, though
| justaguyhere wrote:
| Yes, during normal times. But these are not normal times -
| like, who is hiring now? If I were a top performer, I'd
| take a salary cut if it means saving my colleague's job.
|
| I get what you are saying though. They are a business and I
| guess they're doing what is best for their business. The
| severance package is generous (relatively speaking), so
| there's at least that.
|
| Edit : I guess I didn't word this properly. I was saying
| they'd lose top performers if their salaries are cut,
| during normal times.
| icelancer wrote:
| >> Yes, during normal times. But these are not normal
| times - like, who is hiring now?
|
| Lots of companies with cash reserves, picking up good
| talent on the market.
| raz32dust wrote:
| > "If I were a top performer, I'd take a salary cut if it
| means saving my colleague's job."
|
| Would you, really? If you can get a job at
| FB/AMZN/GOOG/Netflix paying the same or more, would you
| really stay? Highly unlikely I think.
| justaguyhere wrote:
| Yes, I would. Actually the higher the salary, the easier
| it is to give up a portion of the salary, at least for
| me.
|
| I understand your skepticism, but I would - I am single
| and my needs are small, so it is not like my kids are
| gonna starve.
| pedrosorio wrote:
| > But these are not normal times - like, who is hiring
| now?
|
| Facebook and Amazon, just to mention a couple of giants
| that would probably love if every company doing layoffs
| right now would instead halve their top performers'
| compensation.
|
| This is not as relevant in the Airbnb case since the
| expected value of RSUs went down so much that this is
| effectively the case even with no salary cuts.
| dillonmckay wrote:
| During what 'normal times' are salary cuts okay?
| monkeyfacebag wrote:
| 14 weeks of pay + 1 week / year seems like a silver lining in an
| otherwise bad circumstance.
| vikramkr wrote:
| The health insurance too. That's huge and really important for
| US employees, multiplied 10x in a pandemic.
| ryanwaggoner wrote:
| _Separated employees will receive 14 weeks of pay, and one more
| week for each year served at the company (rounding partial years
| up). The firm is also dropping its one-year equity cliff so that
| employees who are laid off with under 12 months of tenure can buy
| their vested options; Airbnb will also provide 12 months of
| health insurance through COBRA in the United States, and health
| care coverage through 2020 in the rest of the world._
|
| Layoffs always suck, no matter what, but this is laudable
| behavior on their part.
| keiferski wrote:
| _Separated employees will receive 14 weeks of pay, and one more
| week for each year served at the company (rounding partial years
| up). The firm is also dropping its one-year equity cliff so that
| employees who are laid off with under 12 months of tenure can buy
| their vested options; Airbnb will also provide 12 months of
| health insurance through COBRA in the United States, and health
| care coverage through 2020 in the rest of the world._
|
| That strikes me as a pretty generous severance package.
| cm2187 wrote:
| That also means they have no expectation for the market to come
| back for at least 2 years.
| actuator wrote:
| Dropping the cliff period for new employees is pretty much
| useless. The equity/ESOPs new employees will be exercising will
| be of the last valuation price which would be already high, and
| after Covid-19, with the struggles of tourism industry as such
| the notional value would have fallen a lot. So if you exercise
| those significantly expensive options now, you would probably
| need to hold it for a long time and really believe that AirBnB
| can be where it was.
| lucasmullens wrote:
| From some other comments it sounds like they're RSUs, not
| options.
| actuator wrote:
| Why do you need to buy the RSUs then? Don't you already get
| them once they vest.
| hilbertseries wrote:
| I think there was a 1 year vesting cliff, so if you get
| laid off before a year you get your rsus prorated instead
| of getting nothing.
| truthwhisperer wrote:
| does it matter? You want to make the world a better place
| right? Or is the world defined as a 50^2 place somewhere
| in a too expensive part of the world .. hmm
| rb808 wrote:
| As a European, that isn't great. (options excepted). Usually I
| thought you get 14 weeks plus a month for every year of
| service, not a week.
| conanbatt wrote:
| And typically much higher unemployment numbers
| r00fus wrote:
| Not these days. Europe is doing much better than the US in
| terms of unemployment - wonder why?
| rubber_duck wrote:
| As a European I wouldn't be too fast to gloat - the EU is
| trying to keep jobs on hold but it's not clear to me what
| will come out of this - it seems like the restrictions
| are going to be here for a long time and keeping
| businesses afloat artificially could end up blocking
| restructuring. My biggest concern right now is that
| migration restrictions are going to kill seasonal manual
| labor migration and government unemployment subsidies
| will prevent local population from taking up that work -
| we could end up with major issues in things like crop
| harvesting.
| 9HZZRfNlpR wrote:
| Where is that? Many countries are already taking seasonal
| workers with 14 day quarantine.
| missedthecue wrote:
| But your pay would be $50k p.a. rather than $175k
| dan-robertson wrote:
| I feel like this is a bit of a sweeping generalisation.
| Certainly many countries in Europe would not give this. And
| others would have maximums which are lower than typical
| Airbnb pay.
| nicbou wrote:
| Not to mention that losing health insurance coverage wouldn't
| be a concern.
| elhudy wrote:
| Glad to see the money they are stealing from those of us who
| can't cancel our summer airBNBs is going to a good cause.
| pwned1 wrote:
| Is it just a certain time period? I've cancelled two stays
| and have received full refunds, but both were in April and
| May of this year.
| elhudy wrote:
| Mine is late June / Early July in Italy of all places, and
| is not covered. They keep extending the coverage period
| though so I'm crossing my fingers.
| ramimac wrote:
| They're gradually pushing the time period back, as of a
| couple days ago I believe it was end of May. As of right
| now it's for "stays and Airbnb Experiences made on or
| before March 14, 2020, with a check-in date between March
| 14, 2020 and June 15, 2020"
|
| Of course, events as far out as late July are cancelled due
| to COVID-19
|
| https://www.airbnb.com/help/article/2701/extenuating-
| circums...
| elhudy wrote:
| Additionally, this policy has been modified since COVID
| arose to only apply to 1.5 months out.
|
| In the past, and in fact when I booked my airbnb (late
| last year), extenuating circumstances would have easily
| covered an epidemic 2 months out.
| saiya-jin wrote:
| How come you can't cancel? Did you book at place with strict
| cancellation policy or is there something else?
| elhudy wrote:
| Yes, strict cancellation policy. For those following the
| drama, they keep extending their extenuating circumstances
| policy out but it doesn't cover most of the summer yet.
| Apparently the circumstances are only extenuating for the
| immediate future.
| sjg007 wrote:
| I wouldn't worry, it will extend out.. we aren't going to
| be out of this mess for 12-18 months.... the US
| especially.
| darkerside wrote:
| Allowing former new employees to buy shares in a private
| company essentially at cost doesn't seem terribly generous to
| me.
| [deleted]
| polote wrote:
| That's roughly equivalent to what anyone in France would get if
| they get fired
| Joky wrote:
| According to https://shieldgeo.com/terminating-an-employee-
| in-france-a-gu... it would rather be roughly 1 week pay per
| year of seniority.
|
| However it is hardly comparable as unemployment benefits
| would kick in (on average 72% of your previous salary after
| taxes, maximum duration 24 months with decreasing amount).
| For instance if you worked 3 years and your annual salary was
| 80k, you could get a benefit of 57k over 12 months.
| duxup wrote:
| Yeah that's generous by most standards.
| namdnay wrote:
| By most _American_ standards
| KoftaBob wrote:
| "In many countries, the severance pay is a lump sum that
| increases with the employee's tenure in the company and
| their wage level. In the Czech Republic, Denmark, Hungary,
| Italy, Lithuania, Poland, Portugal, Slovakia and Spain,
| employees with service of up to one year are entitled to
| severance pay (in most cases one month's pay), while in
| Luxembourg employees have to have a minimum of five years
| within the organisation before receiving severance pay.
|
| In France and Slovenia, employees with up to five years'
| tenure are entitled to severance pay amounting to a maximum
| of one month's pay; in Spain, the entitlement is 100 days'
| pay for the same tenure."
|
| AirBnB is giving laid off workers around 3 months of
| severance pay. How is that less competitive than what's
| given in Europe?
| saiya-jin wrote:
| Less competitive no, rather similar to what most white
| collar companies give. Some go way beyond, ie my own when
| fired due to similar reasons (and not say criminal
| behavior) will add 1 salary per year worked. It can lead
| to some serious package for long timers. This ain't for
| some C-level managers only, but regular desk IT folks for
| example.
|
| Now if they would be firing say 30-50% the rules might be
| different, this ain't part of any written contract, but
| they did so for all folks fired for last 10 years. But
| that's probably the best package I've ever heard of,
| regardless of location.
| renewiltord wrote:
| Yeah by most American standards, and also by most
| standards.
| TulliusCicero wrote:
| Where do you live that companies will give 14 weeks'
| severance pay to people who've only been there a year?
| hef19898 wrote:
| In defence of the parent, I read days instead of weeks
| initialy.
| speedgoose wrote:
| ~~Yes, because it's pretty shitty for Europe.~~
|
| I didn't understand well, sorry.
| KoftaBob wrote:
| "In many countries, the severance pay is a lump sum that
| increases with the employee's tenure in the company and
| their wage level.
|
| In the Czech Republic, Denmark, Hungary, Italy,
| Lithuania, Poland, Portugal, Slovakia and Spain,
| employees with service of up to one year are entitled to
| severance pay (in most cases __one month's __pay), while
| in Luxembourg employees have to have a minimum of five
| years within the organisation before receiving severance
| pay.
|
| In France and Slovenia, employees with up to five years'
| tenure are entitled to severance pay amounting to a
| __maximum of one month's __pay; in Spain, the entitlement
| is __100 days __' pay for the same tenure. "
|
| AirBnB is giving laid off workers around 3 _months_ of
| severance pay. How is that less competitive than what 's
| given in Europe?
| FireBeyond wrote:
| My brother (in Australia, where I grew up, before moving
| to the US) recently got laid off from his firm (actually,
| I believe they were going out of business due to
| retirement or such). Their policy was 1 month severance
| per year. He'd been there 14 years, 14 months severance.
| disiplus wrote:
| yup, it's better then what you would get in most of the
| europe.
|
| does US have an unemployment plan. how long and how much
| do you get ?
| 112012123 wrote:
| Yes. It depends on your salary, but given the current
| covid crisis, most airbnb technical employees are
| eligible for around $4200 per month for 26 weeks.
| toomuchtodo wrote:
| > does US have an unemployment plan. how long and how
| much do you get ?
|
| Each state has unemployment insurance. In most cases, the
| benefit amount per week/month puts you around the federal
| poverty line for an individual. No state has a severance
| requirement (although some do require your PTO balance be
| paid out as wages).
|
| https://fileunemployment.org/unemployment-
| benefits/unemploym...
| duxup wrote:
| Yeah so severance is what you get from the company
| directly.
|
| That counts as your usual pay. So during that time you
| don't get 'unemployment'. After the severance runs out
| then you collect unemployment, how much that is varies
| state to state.
| disiplus wrote:
| then it's a little different in europe (afaik), you get
| your severance, it's one time payment but it's usually
| not that big. and you can right away get your
| unemployment payment. the length and the amount depends
| on how much have you worked and the pay you had. the one
| does not depend on the other.
| speedgoose wrote:
| Oh right, it's before the state unemployment. Then I
| don't know.
| rightbyte wrote:
| Do the employees have to work during these 3 months? It
| is not clear from the article. If not, it is quite
| "competitive".
| KoftaBob wrote:
| Their last day is May 11th, so no they're not working.
| Otherwise it wouldn't be considered severance pay, that's
| basically just giving 3 months notice.
| duxup wrote:
| It's not severance if you're working. Severance comes
| after you're not working.
| pb7 wrote:
| It's not, people just love shitting on America. 14 weeks
| + 1 additional for each year served at US salaries +
| unemployment + paid health insurance for 12 months is
| extremely generous compared to the peanuts that Europe
| pays engineers.
| llukas wrote:
| Unless you realize that you're comparing severance
| package of one of top US companies to EU standard.
| KoftaBob wrote:
| the original comment was specifically saying AirBnBs
| severance isn't impressive compared to europe, which is
| not true.
| llukas wrote:
| AirBnBs severance package is impressive compared to rest
| of US.
|
| Twisting words a bit: most of Europe doesn't get much
| worse severance than top US corporation. That's
| impressive.
|
| IT in Europe also gets better severance etc.
|
| Also, not checked in other countries, but in Poland for
| example: regular salaried employees get 3 month notice if
| tenure is 3+ years.
| saiya-jin wrote:
| What you describe here as generous is pretty standard in
| my part of Europe, things like health insurance or
| unemployment benefits aren't even a concern to worry
| about. In fact, when fired, my company normally gives 3
| months PLUS 1 month per year worked. Now _that 's_ what I
| call generous.
| pb7 wrote:
| What part is that? And what's the average salary there?
| It's easy to give 6 months of severance when you're
| severely underpaying compared to global labor markets.
| duxup wrote:
| What's the average for Europe?
| disiplus wrote:
| afaik in some countries its not required (switzerland?)
| and in others it depends on the number of years the
| person worked in company. i think it depends on the
| country.
| Schweigi wrote:
| No severance pay required in Switzerland but there will
| be a mandatory one month to three months notice period. A
| company can decide to send their workers home earlier but
| they would still be required to pay salary for that
| period. Though when laying of 25% there will be some
| additional government requirements as it would be
| classified as a mass-layoff and will need a social plan.
| [deleted]
| creddit wrote:
| What's an example of a country where this isn't generous?
| conradfr wrote:
| In France "cadres" (managers, most devs etc) will still
| be payed for three months (while you can work another job
| at the same time and get double income then), plus of
| course all accrued vacation days, and some amount based
| on your seniority at the company and its activity sector.
|
| After the three months most people will qualified for
| regular unemployment.
|
| And until you start working at another company you still
| get healthcare from your former employer's provider.
|
| edit: as it's weeks and not days for Airbnb I guess it's
| pretty similar then.
| creddit wrote:
| > edit: as it's weeks and not days for Airbnb I guess
| it's pretty similar then.
|
| You mean France's is significantly worse (12 < 15 at a
| minimum of 1yr or less)? Did you see the accelerated
| vesting as well?
| hef19898 wrote:
| Germany, health care isn't even a question, three months
| notice is the norm. Plus some additional severance
| payments. Don't take the number for granted, but I
| _think_ IIRC it is something like one month per year. Not
| sure anymore, so.
|
| EDIT: Read days instead of weeks regarding AirBnB
| severance pay. That changes a lot, and it makes it a more
| than generous package by anyone's standards.
| creddit wrote:
| > Germany, health care isn't even a question
|
| How does this mean? As in, it's provided by the state and
| therefore not a part of a severance package or as in
| German employers don't provide any? I'm not sure how to
| take this. If it's that the state provides it, then
| arguably AirBnb is being even more generous or possibly
| it shouldn't be included in the comparison. It's about
| what AirBnb is providing when discussing their generosity
| or lack thereof.
|
| > IIRC it is something like one month per year.
|
| So possibly way more generous or possibly way less
| generous depending. Under AirBnb's scheme, it's more
| generous so long as you've been employed less than 5yrs.
|
| Not sure I'm seeing how German standards are so much more
| generous. Possibly that's fair under the healthcare
| standpoint but even then AirBnb is providing for a whole
| year so not really clear at all that that wouldn't cover
| an individual until their next role.
| hef19898 wrote:
| Health care is public, so worst case it is covered by the
| state. Also, just realized that AirBnB offer 14 _weeks_
| of pay. Initially read it as days... My fault. Being
| weeks, it really is a great package, health care or not.
| And even more so for the US with health care. All I can
| say is Kudos AirBnB.
| tengbretson wrote:
| Well, average developer salary in Europe is around $70k vs
| $163K average at Airbnb.
| markdown wrote:
| > Separated employees
|
| Separated? Is this American english?
| bogomipz wrote:
| It's actually an HR(human resources) term. There's a standard
| document employees sign called a "separation agreement." See:
|
| https://gusto.com/blog/people-management/employee-
| separation...
| keiferski wrote:
| Sounds like a weird new euphemism for _laid off_ , designed
| to make it seem less negative.
| HumblyTossed wrote:
| Companies go out of their way to use words that they hope
| will soften what is actually happening.
|
| Separated almost sounds as if this was consensual.
|
| That being said, Airbnb gets some credit for a decent
| severance.
| julesqs wrote:
| it's generous by startup standards, but laid off kickstarter
| employees are getting an even better deal because they
| unionized: four months full pay for everyone, up to six months
| of paid (not COBRA healthcare), recall rights if the jobs open
| back up, release from non competes
|
| https://twitter.com/ksr_united/status/1256382357311012871
| johnnyb9 wrote:
| How is this an even better deal? About the same amount of
| pay, half the healthcare paid (COBRA healthcare is same
| plan). As for recall rights and release from non-competes,
| these are slightly better than nothing I suppose.
| tpmoney wrote:
| Since COBRA is always available to terminated employees, this
| announcement reads that AirBnb is paying for 12 months of
| health care.
| julesqs wrote:
| ah you might be right. wording confused me.
| senderista wrote:
| "We had to let you go to pay for your severance package."
| vkou wrote:
| Back in the day, severance packages for white collar workers
| were close to one month per year served. My father received
| that from Kodak (Not once, but twice... He had the rare
| privilege of being laid off (From the same team, no less) in
| 2009, and then again in 2016. The severance package did not
| change much between each of his stints of employment.)
|
| With that schedule, anyone who worked at AirBnB for four years
| or less looks to be in a similar position.
| FireBeyond wrote:
| My brother (in Australia) got that this year. 14 months
| severance after 14 years.
| MattGaiser wrote:
| 4 years at Airbnb would be quite a long time.
| spats1990 wrote:
| >Back in the day, severance packages for white collar workers
| were close to one month per year served.
|
| in Korea this rule is in actual labour law. One month's
| salary for each year employed fulltime, for everybody.
| spacefearing wrote:
| I'm not a fan of Airbnb's business but this is highly
| commendable.
|
| The severance package is the core metric to judge a company
| that is doing layoffs. In this case, it sounds like Airbnb did
| the right thing. Airbnb fired people well in advance of when
| they were actually _forced_ to. This enabled them to provide an
| ethical severance.
|
| Some companies wait until the last minute and then provide two
| weeks or similar. These companies should be publicly shamed for
| all time.
| texasbigdata wrote:
| Agree with you but....
|
| 4x12 = 48 weeks of compensation disbursed by the entity.
| Restated compared to some nightmare no severance scenario
| meant they effectively terminated 4 FTEs to achieve slightly
| less than 3 FTEs of cost savings (adjusted for healthcare
| costs).
|
| I'm not arguing against AirBNBs approach btw. Their CEO had a
| wonderful podcast on the Masters of Scale pod roughly two
| weeks ago.
|
| However the Rawlsian philosophy on that marginal employee
| that got terminated effectively to fund the severance for
| herself and her colleagues is a tricky ethical consideration.
| danenania wrote:
| It doesn't seem all that tricky to me. While losing any job
| is rough, losing a job with enough severance and benefits
| to cover the ensuing period of uncertainty and a job search
| likely isn't going to be _that_ bad for people who were
| able to get hired by Airbnb to begin with. But losing a job
| without a safety net could be a disaster. Imo it 's far
| better to put more people in the 'bad, but not that bad'
| situation than to put _anyone_ in the 'disaster'
| situation.
| mgiampapa wrote:
| I wouldn't judge them too softly, they did after all promote
| having an internal services food team for years and virtue
| signaled all over the place that they wanted them to be team
| members and not contractors like every other tech company
| (they got stock, sick days, vacation, benefits etc), then
| fired them all over Christmas break one year and replaced
| them with contractors.
| arcticbull wrote:
| Sounds amazing, I wish someone would lay me off like that,
| damn. Four months PTO with healthcare?!
| scarface74 wrote:
| "Airbnb will also provide 12 months of health insurance
| through COBRA"
|
| That just means that it is available to you -- not that they
| are going to subsidize it.
| jahlove wrote:
| They will "cover" 12 months of COBRA, which I take to mean
| they'll pay the premiums:
|
| > 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.
|
| https://www.cnbc.com/2020/05/05/airbnb-to-lay-off-
| nearly-190...
| mlinsey wrote:
| Anyone who loses health insurance due to losing their
| employment (even if they voluntarily resign) is legally
| allowed to buy COBRA for 18 months. I think they are paying
| for it, otherwise this would be a fairly meaningless
| statement since the employer isn't involved with COBRA at
| all and that's less eligibility than any employee would
| have.
| nicesave wrote:
| Many times employers will make statements like this for
| better PR (always leaving out that they were required to)
| kyleee wrote:
| Agreed, it definitely sounds like they are paying for it
| ChuckMcM wrote:
| You actually have to pay the full premium for healthcare. But
| still, assuming a months pay covers at least 3 months of
| Cobra coverage, that is 3 months PTO to get your head
| straight.
| actaeon169 wrote:
| As I recall, COBRA is pretty expensive.
| tlrobinson wrote:
| I believe it's just the full cost of the plan you were
| already on, the sum of what you and your employer were
| paying for it.
|
| So it can be expensive if your employer was paying a lot
| for it.
| bluedino wrote:
| They wanted like $1400/month for family coverage when I
| left my last job. I rolled the dice and went without it.
| It's available retroactively so if you need it later you
| can sign up for it.
| jeromegv wrote:
| The crazyness of the best country in the world. "I rolled
| the dice!". This looks insane to any non-American.
| chrisseaton wrote:
| Do you realise you have to find a new job within those four
| months?! It's not 'time off', it's time desperately searching
| for a new job until you start eating into your savings and
| your children end up starving.
| 75dvtwin wrote:
| What is the median salary of people who were laid off?
|
| It is some how hard to believe that they will start
| starving within a year after a layoff (perhaps if they plan
| to maintain their expense levels unchanged, but still
| sounds very improbable)
|
| What are the calculation that lead you to this conclusion ?
| tmpz22 wrote:
| Air BnB employees in California will be eligible for
| $4200/mo in unemployment insurance, so compound the two
| together and that is a lot of dough.
|
| Comparatively I got 0 severance from my small company but
| am grateful for the unemployment insurance.
| silviogutierrez wrote:
| It's confusing. Some read it as "COBRA is available at full
| price" and others as "healthcare paid by AirBNB". My
| understanding is COBRA is just the default. The company can't
| really block it, for 18 months. No action required.
|
| So if AirBNB went out of their way to mention COBRA, it
| likely means they're covering it.
| iphone_elegance wrote:
| You say that before you need to find a new job in this
| environment
| ulfw wrote:
| Totally agreed. Those are very generous terms, no matter where
| in the world. Well done AirBnB.
| [deleted]
| freepor wrote:
| I have never seen a more generous one.
| yojo wrote:
| I'm surprised they were still handing out options - don't most
| later stage startups switch to RSUs? I'd hate to have to decide
| whether to exercise today, cliff or no cliff.
| tempsy wrote:
| Long term employees have options. All newer US based
| employees should have RSUs
| enra wrote:
| They're RSUs, Airbnb hasn't been given options for the last 7
| years or so. Techcrunch is just reporting it wrong.
| fennecfoxen wrote:
| I haven't seen RSUs outside of publicly traded companies.
| pb7 wrote:
| RSUs are common in late stage startups. The share price at
| the time of grant is calculated based on an estimated
| valuation. If I remember correctly, in the year or two
| leading up to IPO, Uber issued RSUs to employees at a
| valuation of $49/share so the IPO price of $45 was already
| below grant price for many that joined late.
| [deleted]
| hibikir wrote:
| Late stage startups have to offer RSUs, as the equivalent
| option package becomes extremely unattractive if you depart
| before the company is public.
|
| Imagine, for example, an initial option grant of 180K
| shares at $2.00, which expire 90 days after you leave. Then
| fast forward two years: The valuations have doubled every
| year, and half are vested, so you have 90k options priced
| at $2, but that last valuation puts at $8 each. Sounds like
| you have a lot of potential money right? Maybe, but not if
| you leave. If the company isn't public, you either have to
| rely on some secondary market that might be really shady,
| or have to hold your shares until IPO. To do so, you need
| to spend $180K, and prepare for an AMT tax hit of, roughly,
| 28% of the gains. 90k shares, with $6 a a share paper
| gains, means $135k in taxes that year.
|
| So barring that secondary market for the shares, we are
| talking about spending $300k exercising the options. Few
| people can, or are willing, to put that much money in, even
| if on paper they are up hundreds of thousands of dollars.
|
| RSUs will demand action at IPO, as you can't delay the
| exercise forever, but it's far better than, in practice,
| letting a majority of options lapse, even when you are
| pretty sure they'll be deep in the money at IPO.
| dilyevsky wrote:
| Yet they are quite common in late stage pre-ipo companies
| bc few will take their options
| kahnjw wrote:
| I got an RSU offer from Pinterest a couple years back when
| they were private, though I turned it down.
| actuator wrote:
| Non listed companies do give RSUs. For example: Stripe
| fapi1974 wrote:
| Does anyone recall if Airbnb were one of the firms to
| institute more employee-friendly exercise windows? If so that
| takes some of the pressure off the decision.
| dilyevsky wrote:
| They are probably double trigger rsus with 10y expiration
| jzl wrote:
| You mean if you're still an employee? I've read their
| RSUs have 7y expiration, which is part of the whole
| Airbnb IPO problem because the ones from 2014 will start
| expiring next year.
|
| But what's the window to exercise once you leave the
| company? I doubt it's until expiration.
| H8crilA wrote:
| Forgive my ignorance but how do RSUs expire? I thought
| those are just stocks?
| airstrike wrote:
| Why would you not want optionality? Optionality always has
| carries an intrinsic positive value.
| kahnjw wrote:
| There are other factors at play. Most employers offering
| options don't pay as much in total as those employers
| offering straight up RSUs.
| notJim wrote:
| Options are awful. Exercising them can trigger AMT, where
| you get to pay taxes on money you don't have yet (and
| cannot get) at a time when you probably just spent a lot of
| your savings to purchase the options.
| sokoloff wrote:
| If you started working at Boeing exactly a year ago and
| were leaving today, would you rather have been granted RSUs
| at a notional initial value of $371.60/sh or been granted
| options at a _strike price_ of $371.60 /sh?
| renewiltord wrote:
| Well, yeah, that's Boeing, but if I'm going to work at a
| startup I want options, I want lots of them, and I want a
| good strike price. After all, if it's not going to do
| damned well next year why am I even going there?
| deathanatos wrote:
| RSUs, as structured at companies I've been at, always
| have upside: you can sell them for the stock price, which
| is a least $0. At the worst, you make nothing. Tax is
| paid upon acquiring them by selling a number of the
| acquired RSUs to pay for the tax.
|
| Options, however, can have downside: tax can't be paid
| with the excerised option itself, because you can't sell
| the exercised option. So you have to pay the tax out of
| pocket. Meanwhile, the company can go under, and render
| the options worthless: you've lost the tax amount. If the
| company's valuation increases significantly, the taxes
| can be fairly significant. But you also can't just wait
| to see if the company succeeds, either: every company
| I've been at forces you to exercise within a certain
| amount of time if you leave the company.
| jameslevy wrote:
| Wouldn't you pay income tax on the RSUs based on the
| notional initial value, and only pay tax on the options
| if you exercised them?
| sokoloff wrote:
| (Under US law,) You pay income tax on RSUs only when they
| are both vested and released. (These typically happen on
| the same day, but in the future, not on the grant date.)
| PNWChris wrote:
| At my employer they withhold taxes from the RSUs
| themselves as they vest (taxes are withheld at the bonus
| tax rate using integer multiplication, I believe).
|
| E.g.: you'll get Math.floor(x * (1-bonus_tax_rate))
| shares and will owe no income tax (unless your marginal
| tax rate is over the bonus tax rate). After that point,
| you'll only owe taxes on possible capital gains from
| price at the time of vest to the time you sell.
| philwelch wrote:
| Not really. RSU's don't have a "notional initial value"
| for public companies; if you get them, you pay tax on the
| number of RSU's you got times the stock price at the time
| you get them. Your vesting schedule will just say, "X
| units of ABC on 5/1/20" with no dollar figure.
|
| Brokerages will typically set things up so you can
| automatically sell enough shares to cover your tax
| liability as soon as they vest.
|
| Typically you have to amend your cost basis on your tax
| return for this to actually work, for some stupid
| bureaucratic reason. Probably a conspiracy to make people
| who get equity compensation buy the more expensive
| version of TurboTax.
| deenadz wrote:
| Bc you lose your optionality after leaving the company -
| terminated employees would need to decide whether or not to
| exercise their vested options within some post-termination
| window (typically 30-90 days)
| TheCoelacanth wrote:
| Which would you rather have: a $100 bill or the option to
| buy a $100 bill?
| PascLeRasc wrote:
| Dumb question here, I don't really understand what an
| option is in this context - can you just think of it as a
| call with a expiration of the vesting date and strike price
| at whatever they set? So they're giving you calls, with a
| $0 premium?
| sokoloff wrote:
| Not a dumb Q at all.
|
| It's a call option, with no premium paid, a strike price
| specified [typically the last 409A valuation or other
| better proxy of current value], subject to vesting
| [cannot exercise before this date], but with an
| expiration some number of _years_ into the future
| (typically 10 years from the date of the grant).
|
| So you had it basically correct, except they don't expire
| at the vesting date.
| philwelch wrote:
| 1 RSU is worth 1x the stock price. 1 option is worth the
| delta between the stock price and the strike price, meaning
| 1 RSU is always worth more than one option.
|
| Usually you get more options than you would RSU's to
| compensate for this, but there's still a risk/reward
| tradeoff. I have had stock options that ended up worth $0
| because they were underwater. RSU's would have been worth
| $non-zero.
|
| The fact that RSU's retain some value when the stock price
| goes down is highly relevant to a company like AirBNB which
| is undoubtedly struggling with the current situation. Also
| relevant may be that AirBNB isn't a public company yet,
| making their shares relatively non-liquidifiable. This can
| pose problems both ways: if you get RSU's in that situation
| you've received "taxable income" in the form of a non-
| liquidifiable asset and if you get options, you have to
| choose whether to buy stock in a travel accommodations
| company in the middle of a pandemic that just laid off 1/4
| of their workforce, hence potentially incurring a very
| strong risk of loss.
| redshirtrob wrote:
| The other relevant point, in favor of RSUs is they
| usually have a double trigger for settling. One is
| service time, and the second is an equity event. Which is
| nice because you basically earn the RSU based on service
| time, but it doesn't truly settle until there's a liquid
| market available to dispose enough shares to cover tax
| liabilities.
|
| This is why you'll see recently IPO'd companies reporting
| large one-time equity compensation numbers.
|
| edit: s/vesting/settling. I believe "settling" is the
| term actually used.
| [deleted]
| philwelch wrote:
| Yeah I've never seen how this works during an IPO cycle,
| just in an already-public company.
| fossuser wrote:
| You don't necessarily get taxable income from RSUs [edit:
| when they're granted] if they're structured in a
| 'Facebook Style' RSU which has an expiration if the
| company does not IPO within a certain time frame.
|
| As long as there's a real risk of loss you can avoid the
| taxable income and private companies with high valuations
| will do this to help employees avoid the bad tax
| situation on an illiquid asset (without need to have huge
| amounts of cash to exercise options).
|
| Options similarly must expire after 10 years for similar
| risk of loss tax reasons (as I understand it).
|
| I was told the RSUs are 'Facebook Style' because they
| were the first to pioneer this.
|
| Even options with a low strike price can be problematic
| because tax law is dumb and charges tax on the spread
| before sale when you exercise (so you can end up with a
| huge tax bill on exercise without the ability to sell the
| shares to cover it). ISOs were supposed to prevent this,
| but AMT has not increased to match inflation over time
| and was never updated to accommodate for this case
| specifically so you still have to pay tax if you hit it
| (which you will because it's low). This wasn't considered
| originally because companies intending to IPO were not
| private >10yrs so expiration risk was not a serious
| problem and you could just wait for the IPO before
| exercise.
|
| So with options even if you save the exercise cash you
| have to save a large amount for taxes depending on the
| spread, or deal with a bunch of loan shark like companies
| that will take a cut to front you the capital.
|
| For most people RSUs are probably preferable unless you
| get in really early and can exercise all the options when
| the spread is zero (preferably with an 83b election for
| early exercise on non-vested shares).
| cyan_atrus wrote:
| i think you're saying this, but just to clarify:
|
| RSUs (even facebook-style) are definitely taxable. With
| options, you're in control of when to take the tax hit.
| With facebook-style RSUs, the tax hit comes when the
| stock gets distributed (taxed as ordinary income) --
| usually in the form of withholding some amount of shares.
|
| ---
|
| Important to remember with RSUs in pre-IPO companies:
| even though you might get shares distributed at IPO,
| you're usually subject to a lock up. This is unfortunate
| because if you receive stock at IPO, you have to pay
| taxes at them -- so if your company IPOs at $50, then
| drops to $20 when the lockup expires, you have to pay
| taxes on the shares you received at $50 value even though
| you couldn't sell shares at that value.
| fossuser wrote:
| Yes, thanks for the clarification.
|
| My understanding is they're taxable, but only after
| they're liquid which makes it easier for the employee. I
| think most companies doing FB style do something fancy to
| avoid the distribution tax lockout issue (witholding some
| to cover tax or direct listing to avoid lockout).
|
| The situation where you have a huge tax bill and no cash
| to pay it (or worse a huge tax bill and your illiquid
| stocks have crashed to $0) shouldn't happen, though I
| guess there's still a chance in the pathological case you
| describe? Not sure if that's avoidable.
|
| The other thing I forgot to mention is that if you do
| risk all this cash on option exercise/taxes and your
| company does go to $0 you do get to take a $3000 AMT tax
| credit each year until you die (but maybe only if you
| don't have kids or something, can't remember) - it's not
| great.
| junar wrote:
| Actually, underwithholding can still happen. Employers
| may withhold at a flat 22% federal rate, which can be
| significantly lower than a highly paid employee's actual
| marginal tax rate. So the employee may still need to
| increase the withholdings on their regular pay, or make
| an estimated tax payment for each quarter of RSU income.
| whakojacko wrote:
| You don't have nearly as much "optionality" when you have
| to come up with $X00,000 within 90 days of leaving your job
| or forfeit your equity
| tinyhouse wrote:
| I thought RSUs are only given by public companies. Anyway,
| they would be crazy not to exercise.
| mason55 wrote:
| Hopefully they have cash to cover the exercise and the
| taxes!
|
| Tough choice to make right when you just lost your job. The
| tax bill could be tens of thousands of dollars or more.
| tinyhouse wrote:
| If they don't have the money they can take a loan (maybe
| hard without a job) or try to raise it (lots of people
| will be happy to invest). Let's not forget that many of
| these individuals have been making top dollar. Airbnb is
| known to be very competitive, even with FANNG level
| salaries.
|
| I don't see it as a tough choice. Airbnb will IPO, it's
| just a question of when. It's a safe investment to make.
| This is a company operating all over the world that had
| $4.3B in revenue last year. If not COVID-19 they would've
| probably IPO'd very soon. They will get through it.
| jbay808 wrote:
| It would be nice if you could just hand over a percentage
| of the options to the government as a tax, instead of
| having to pay in dollars at a guess of the value.
| walshemj wrote:
| I am surprised that isn't an option it certainly is in
| the UK
| redshirtrob wrote:
| I'd expect the options might be under water based on
| recent funding announcements. Probably still expensive to
| exercise, but I can't see how there would be a tax
| liability if they are under water.
| daseiner1 wrote:
| i'm not super in the know here, but why would corporate
| financials be relevant to the tax obligations of
| individuals?
| redshirtrob wrote:
| It's pretty much impossible for us to say in this case
| since the terms weren't disclosed that I know of. They've
| been described as debt and equity. It's reasonable to
| assume the equity component would imply a certain
| valuation, and that valuation could be down from previous
| valuations.
|
| If you received options at a strike price at the peak
| valuation, then the current valuation may be below that
| level.
| da_chicken wrote:
| Yeah it's going to be a hard decision to make for a lot
| of these people, especially given some of the bad press
| that these kind of gig factories have been enduring.
| kahnjw wrote:
| Some private companies offer RSU grants. I've been offered
| them.
| abhorrence wrote:
| They are RSUs, at least in the US.
| three_seagrass wrote:
| Do employees have to waive filing unemployment to accept the
| severance package?
|
| In California those can last up to six months.
| kirubakaran wrote:
| No, California considers severance to be compensation for
| past work.
| pb7 wrote:
| I don't think they're legally allowed to waive your
| unemployment insurance payout.
| chadlavi wrote:
| At first I misread this as 14 _days_ and was wondering why
| everyone is calling this such a "lavish" severance. Now I get
| it.
| lostmsu wrote:
| I first misread it as "14 months" (as usually you count in
| months), but it was way out of bounds.
| xenospn wrote:
| It's really strange to me that companies in the US can just
| determine how much severance they're "willing" to pay. Why
| is it even up to them?
| niij wrote:
| Because it's coming out of their pockets.
| xenospn wrote:
| Same in Israel, but it's mandatory to pay a months' wages
| for every year you worked at the company. The employer
| has to pay into a fund that the employee can cash out
| when they're let go.
| r00fus wrote:
| So are payroll taxes, and they're not "up to the
| company".
|
| We can see from the priorities how workers have been left
| out of the decision making for decades in the US.
| BlueDingo wrote:
| Aren't they though? My understanding is that they pay the
| payroll taxes on behalf of the employees but I think they
| aren't required to, it's just customary. If you're an
| independent contractor you pay it yourself.
| r00fus wrote:
| Contractors aren't payroll, they're technically
| AP/suppliers. If you do payroll, you pay taxes - it's the
| law.
| jklein11 wrote:
| Most employees in the US are hired at will. This means
| that the companies are not obligated to continue to offer
| their employees work. Severance is usually paid by the
| employer so that the employee agrees to leave amicably
| and does not sue for wrongful termination.
|
| Which country do you live in? Is it common practice for
| all employees to have severance negotiated as part of an
| employment contract? What happens if the employee decides
| to leave the employer before the contract expires?
| freepor wrote:
| In some cases it's not, some states like California
| enforce minimums, but when they are going beyond the
| minimum then it's obviously up to them.
| CptJamesCook wrote:
| In the US every company pays unemployment insurance. When
| employees are laid off, they receive unemployment
| benefits from this fund until they find a new job (for up
| to 39 months). Severance is the company "willing" to
| paying the laid-off employee more money than unemployment
| insurance.
| Igelau wrote:
| > for up to 39 months
|
| You spelled weeks wrong.
| Spooky23 wrote:
| For a variety of reasons, unemployment is a split
| federal/state responsibility funded by insurance. The
| framework was established back in the Social Security Act
| of 1935. Unemployment is administered and has rules
| developed by states that need to meet Federal standards,
| and the feds fund parts of the system and keep the state
| funds solvent.
|
| Benefits vary greatly. It has been awhile since I worked
| with this stuff, but IIRC Massachusetts is the highest
| payout ($750+) and places like Alabama, Florida,
| Mississippi and Arizona are <$300.
|
| Severance is usually part of an employee contract (if one
| exists) or commonly part of an agreement at separation
| where the employer gets some benefit (waiving the right
| to sue, etc).
| verst wrote:
| I am not sure why you are being downvoted.
|
| It seems that much of HN has very little knowledge of
| (and interest in) business operations and employment law
| in other countries.
|
| I see your question as genuinely inquiring about this
| stark difference from what is common in Europe and other
| countries.
| matthewowen wrote:
| worth noting that this severance is vastly more generous
| than you'd get from statutory redundancy in most (all?)
| countries.
|
| the UK is one week's pay for every year, but with a
| maximum of PS538/week and a maximum of 20 years for
| length service.
|
| given that a software engineer who's been at AirBnB for
| two years is going to get 16 weeks of pay and probably
| makes _at least_ 180k/year, they're probably getting
| around $55k.
| Beldin wrote:
| NL: starting point is one month per year of employment.
| There's more detail to it, but that is the starting
| point.
|
| This compensation does not sound "vastly more generous",
| but not bad for those that were less than 5 years
| employed.
| _dps wrote:
| This is in practice just a deferred salary scheme. Since
| the mandate attaches an unavoidable additional liability
| to every year of employment, that will get rolled into
| the total cost of employment by accountants.
|
| So yes, when you collect the deferred salary it feels
| generous. But you were getting less salary up until that
| point in order to make the system solvent.
|
| One may well prefer this arrangement, but one can't
| evaluate the generosity of the payment without also
| accounting for the cost that made it possible.
| 2019-nCoV wrote:
| You'd be in the top 5% of software engineers in Europe if
| you pull >$55k after tax ANNUALLY. Let alone as a parting
| gift.
| jeromegv wrote:
| This one is more generous, true, but the real question
| is, because the employer decides, how likely it is to be
| better than European countries that have the same
| standard for every employee.
| ferzul wrote:
| really? i've always counted weeks, since every week is the
| same lenght (and paid fortnights, since every fortnight has
| the same lenght). i get paid by the month now and it's
| super weird to me, as if i'm worth more in february than in
| march.
| ghaff wrote:
| Larger companies tend to prefer weekly/biweekly as you
| don't get that month-length variance. On the other hand,
| many employees don't like it as much because their
| biggest bills tend to be paid monthly so they'd prefer
| their paychecks to be aligned.
| r00fus wrote:
| I've seen both and as an employee the semi-monthly is the
| best - it's about biweekly but you don't have to wonder
| why some months you only see 2 paycheck vs. 3.
| Predictable is really good.
|
| From a company standpoint, not having to accrue the
| liability on the ledger simplifies the accounting
| auditability & ability to close your books monthly.
| MereInterest wrote:
| I've had it both ways, and prefer it biweekly. That way,
| I can build my budget based on 2 pay periods, and have
| the occasional 3rd paycheck in a month go immediately
| toward savings.
| anamexis wrote:
| Same for me. It feels like getting a bonus two months a
| year.
| ghaff wrote:
| I've had it biweekly including in my first "tech" job. I
| made enough that paying bills wasn't really an issue and
| having the "extra" paycheck for savings seemed almost
| like free money towards savings/paying off loans.
|
| On the other hand, I understand people who are on tighter
| budgets who would rather have their revenue better
| aligned with their expenses rather than having to balance
| them on their own.
| keiferski wrote:
| Somehow _14 weeks_ also seems less than _3 1 /3 months,_ even
| though they're the same.
| andy_ppp wrote:
| And slight more that a quarter of a year seems more to me
| again...
| ryantgtg wrote:
| But those all seem pale next to 98 days.
| dan-robertson wrote:
| I get paid monthly and have a yearly salary so three and
| a half months or slightly over a quarter of a year are
| durations I can more easily convert to an idea of money
| (or time), which I think is the point. If I hear 14 weeks
| or 98 days I can't easily (ie naturally) convert it into
| terms I can think about.
| [deleted]
| [deleted]
| hef19898 wrote:
| Deleted
| vkou wrote:
| In parts of countries like Canada, the last part isn't
| particularly important, but it's not nothing. Typically,
| white collar employers cover, in part, or in full, medical
| insurance premiums that every resident is expected to pay. In
| BC, prior to the recent phase-out, it was ~$900/year. (That
| money now comes out of income taxes.)
|
| Employers paying for that kind of benefit is either tax-
| advantaged, or just consistency of policy between their US,
| and Canadian offices. Not sure which.
| hef19898 wrote:
| Damn, deleted the comment to soon it seems... Agree, for
| the US it isn't to bad a package, especially considering
| the circumstances and the health care system. All the best
| for the affected people!
| schkkd wrote:
| That's why when a yet another aspiring startup wants to hire
| me, I ask for a high sign on bonus as an insurance, monthly
| vesting cycle, at least 200k in base pay and high severance
| upon termination. Never been given that, but I don't regret:
| looking back, all those "just 1 year till IPO" companies are
| underwater.
| colordrops wrote:
| Most startups are an unintentional scam by unwitting
| founders.
| blackrock wrote:
| What's your batting average?
| jfk13 wrote:
| "Never been given that".
|
| Zero, apparently.
| jameshush wrote:
| The "high severance upon termination" is smart, I never
| thought about asking for that. I'll definitely try that in
| the future!
| bkanber wrote:
| There's a reason nobody has ever extended him this offer,
| and I suspect this is it.
| robocat wrote:
| This is called a a golden handshake:
| https://en.wikipedia.org/wiki/Golden_handshake
|
| Unless you are receiving executive level compensation
| and/or you have a serious public reputation on the line, no
| reasonable company would consider giving you that. It would
| give you the perverse incentive to try to get fired and
| someone negotiating for that would be a strong negative
| signal - an economic moral hazard.
| https://en.wikipedia.org/wiki/Moral_hazard
| itsmefaz wrote:
| I think I'm missing something here.. but how can one
| negotiate severance pay for termination.
|
| I was under the assumption that companies offered severance
| pay as a means to save face.. and this is not part of the
| offer negotiation.
| bluntfang wrote:
| anything is for sale and on the table, you just have to
| ask/demand it. Doesn't mean you're going to get it though.
| schkkd wrote:
| Everything is negotiable. You can negotiate a private
| office with a ocean view if you're valuable enough. This
| won't work for rank and file employees obviously.
| mhluongo wrote:
| > I was under the assumption that companies offered
| severance pay as a means to save face.. and this is not
| part of the offer negotiation.
|
| Quite the opposite- this is how exec compensation works. It
| seems less common in startup land but I've dealt with it
| before
| SamReidHughes wrote:
| For some high-level positions, it gets negotiated up-front.
| You're leaving some other company, taking a risk, and
| there's a good chance you might not be right for the new
| company.
|
| But if you're less high-level but rare and desirable, well,
| some situations, like moving cross-country, might make it a
| bit appropriate.
| jameslevy wrote:
| Monthly vesting without a year one cliff is not really done,
| AFAIK. I also don't think that there is a lot of wiggle room
| for negotiated severance terms. But sign on bonuses and 200k
| base pay could certainly be on the table.
| mav3rick wrote:
| It happens at both F & G in FAANG.
| monktastic1 wrote:
| Monthly vesting in the first year?
| chapplap wrote:
| Monthly at Google, quarterly at Facebook.
| freepor wrote:
| The only point of the one year cliff is to pay someone
| less, or keep a startup's cap table clean. For a public
| company there would be no point.
| Domenic_S wrote:
| Can confirm that at G.
| [deleted]
| qppo wrote:
| Are you an engineer or a professional athlete?
| [deleted]
| ithkuil wrote:
| Anybody accepted those terms?
| Southland wrote:
| He literally wrote "Never been given that"
| schkkd wrote:
| Nope, no one. And I could negotiate terms with directors,
| VPs and CEOs (of small firms) over lunches: meaning that
| they deemed it valuable enough to spend a few hours of
| their time on me, make a sales pitch and listen. Some
| admitted that while my terms were reasonable, it would just
| too expensive for their company to hire me.
| organicfigs wrote:
| Same, those clowns are Sky Rocket Ventures wouldn't stop
| calling me. I told them to match 65% of my then-salary, they
| realized they weren't talking with a broke 20 year old kid
| and stopped calling me.
| dominotw wrote:
| I found COBRA to be extremely expensive. I instead enrolled in
| obamacare via job loss exception.
| ransom1538 wrote:
| "Beneficiaries then have 60 days to inform the administrator
| whether or not they want to continue insurance coverage
| through COBRA."
|
| If you are paying for COBRA you are doing it wrong. You take
| those 60 days to find private insurance. You basically get 2
| free months of health insurance since you cancel on that 60
| day mark and never pay. If on day 58 you need health
| insurance you pay COBRA. Otherwise - your new private
| insurance kicks in on day 60.
|
| [Yes! You could have history of heart attacks and not find
| cheaper private insurance but I am hoping that isn't you!]
| TulliusCicero wrote:
| It sounds like it's saying that Airbnb will pay for COBRA for
| that duration.
| alfalfasprout wrote:
| Airbnb employee here-- this is the consensus.
| [deleted]
| hn_throwaway_99 wrote:
| My read of that is that AirBnB is paying the premiums for the
| next 12 months, as regardless of what the company does all
| employees are eligible to stay on their employee plan and pay
| their own premiums for 18 months.
| greglindahl wrote:
| ... COBRA is 36 months for California employees.
| vvladymyrov wrote:
| First X (12?) month are paid by Airbnb (ex-employer).
| After that layed off ex-employee can keep health
| insurance through CORBA but will have to pay from own
| pocket.
| notJim wrote:
| When I left my last job, I "lived" in Arizona. There was only
| plan on the Obamacare exchange there, and it was the same
| price as my employer's plan with much shittier coverage.
| vmception wrote:
| COBRA is the same as the plan you had with your company. Most
| companies pay half, some pay 75%, some pay 100%, so it can be
| a sticker shock to many.
| [deleted]
| nojito wrote:
| Another unicorn with a flawed business model poised to trim its
| bloated company.
|
| All signs are pointing to a bubble being popped. It's going to be
| interesting to see how the tech sector looks in 9-18 months from
| now
| Cyclone_ wrote:
| I had a guest that destroyed thousands of dollars of property at
| my house weeks ago and it's still going through their claim
| process. They've been stalling for a while now and it's been
| extremely frustrating since no one in support seems to have any
| idea what's going on.
| lacker wrote:
| There are going to be a lot of tough decisions for people who
| have to decide whether to buy their Airbnb options or lose them.
| I bet a lot of people at Airbnb are wishing they went public
| before all this.
| capocannoniere wrote:
| While Airbnb is clearly going through a rough patch right now,
| there is a clear bull-case argument for why Airbnb will emerge
| stronger than it's ever been after this:
|
| - Airbnb has sufficient cash in the bank to survive the crisis.
|
| - A significant % of hotels and budget chains will not survive
| the crisis --> decreased competitor supply
|
| - People will be looking for budget options when traveling -->
| increased demand for Airbnb
|
| - People will seek to make extra income to make ends meet -->
| increased supply for Airbnb
| Apocryphon wrote:
| Airbnb hosts converting properties into 6-month or longer
| term rentals --> decreased supply for Airbnb
| dorchadas wrote:
| And, hopefully, just hopefully, governments will actually
| step in and _stop_ the supply from going back to AirBnB,
| helping alleviate some of the housing crisis in their
| country (I know AirBnB is a huge issue in Ireland, and
| several of my Irish friends are praying it fails to force
| all those apartments and houses back on the market; I am
| myself, as I 'm possibly moving there this fall for a
| masters.)
| talideon wrote:
| One hilarious part of all this is that I'm not strongly
| contemplating getting a mortgage and buying a place
| _purely_ on the basis that between taxes and repayments,
| it would cost me 2/3 the amount I currently pay in rent.
| vzidex wrote:
| The funniest case will be if governments don't even have
| to step in - I've read cases of AirBNB hosts being
| extremely overleveraged in their "investment" properties.
| With some luck, they'll be forced to sell or convert to
| long-term rentals (which are _very_ strongly protected
| where I live) to avoid defaulting on the cheap debt they
| gorged on.
| talideon wrote:
| There is, unfortunately, the risk of others doing the
| exactly the same thing subsequently, because they'll see
| this as a black swan event that will clear out the market
| of smaller overleveraged AirBnB "hosts", leaving them to
| purchase the properties in question. There are some big
| players, such as "The Key Collection", who are heavy
| users of AirBnB, with a large number of properties, as
| well as more legitimate properties like hotels,
| guesthouses, &c.
|
| There are a few important things to keep in mind.
|
| The Irish government has not been very good at enforcing
| the law around this kind of thing, and I see no reason
| why that should change, especially as the biggest party
| on the government side of the Dail was the main party in
| the last government, and their records on housing
| (they're basically Tories) is notoriously bad. The other
| party in the proposed government is an ideologically
| similar party, and the one the caused our economy to
| implode due to property speculation in the 2000s.
|
| The outlook is not positive.
| taude wrote:
| Would be interesting to know what % of AirBnb Hosts do it on
| a semi-professional basis. I get your arguments for the mom-
| and-pop opening your house and all that. But everytime I've
| been to Europe, or to big cities, the AirBnbs were almost
| always part of a bigger operation. And then there's all the
| people who bought rental properties to operate their own
| AirBnb rentals.
|
| Anyway, my hunch is that the percent % of AirBnbs that are
| actually people utilizing their excess space (initial AirBnb
| model) is small vs more hosts entered via owning and
| operating their own hotels through buying leveraged rental
| properties and the AirBnb platform....
| hyperbovine wrote:
| I honestly don't know what fraction of AirBnb's business
| still consists of indies renting out rooms to vacationers for
| short-term stays. But that market is simply hosed for the
| foreseeable future, if not forever. Complete lack of
| enthusiasm from guests and hosts alike. Driving strangers
| around in your car or having them stay in your home is never
| again going to seem like the great idea that it once did.
| misiti3780 wrote:
| once we have a vaccine, or very effective therapeutics, or
| good antibodies testing things should go back to normal.
| that may not be for years though.
| Apocryphon wrote:
| Going back to the root comment, it's questionable if
| Airbnb will make it to that new time of normal.
| taude wrote:
| I think this is spot on. Every time I've been to Europe to
| stay in an Airbnb in the last 4 or 5 years, it's been a
| professional operation. Same with most of the properties in
| the states. These weren't people leaving their house for a
| weekend and trying to get some extra income. These were
| people who invested in real estate to get into the side-
| channel of psuedo-hotel business. They obviously have
| mortgages, likely not under the same rules of own-occupied
| that might potentially give them protections....
|
| As far as AirBnb trying to get the customer base back, once
| the economy starts to open, even their new policies for
| having hosts have 24 hours between guests and rules for how
| to clean. How is AirBnb going to enforce that? Not to
| mention, their refund policy basically sucks right now, so
| I don't see me or my friends jumping back into using
| AirBnbs once travel does pick up, no way I'm committing to
| a vacation when we my have more surges coming, etc... I'll
| choose a hotel who I can cancel and not have to pay.
| elliekelly wrote:
| Between the recession and a general fear of unnecessary
| travel during coronavirus I doubt there will be increased
| demand for Airbnb.
| nrmitchi wrote:
| There may very well be a clear bull-case argument for Airbnb
| being successful long term, but at the moment that's not
| really the point.
|
| Any long term employees who have been around long enough to
| even have the decision to make regarding exercising options
| (from other comments it appears that Airbnb switched to RSUs
| at some point), would be facing a massive tax liability this
| year.
|
| It is clear that there will be some debate and uncertainty
| around a fair-market-value for Airbnb shares in light of
| COVID, but AFAIK any capital gains, and therefore tax
| liability, will be based on their most recent funding rounds
| (which were obviously based in the pre-COVID world)
|
| Edit: typo-d a word
| dschnurr wrote:
| going public at any point after nov '19 probably would have
| been a disaster for most employees due to lockup period. Let's
| say I have $1M of RSUs at IPO - fed+state gov wants 450-500k
| for taxes total. When I went through Uber IPO they only
| withheld ~30%, which leads to a $200k tax bill at the end of
| the year in this scenario. If stock declines 75% due to COVID
| before I can sell at expiration of lockup period, I'm left with
| $175k ($700k post-withholding * 25%) and $200k tax bill. Not
| sure about you but I'd prefer the non-IPO scenario.
| mdamore wrote:
| I can only hope this leads to a backlash against high growth
| companies staying private for so long. Along with their jobs, I
| imagine many AirBnb employees have lost a majority of their
| (paper) net worth because they were not given the opportunity to
| sell and diversify.
| duxup wrote:
| I think if any employees were relying on that paper wealth...
| that's the problem.
|
| IMO People need to understand what that really is (usually not
| much) rather than blame the company.
| mdamore wrote:
| We're talking about a decade-old company with billions in
| revenue. If your job at AirBnb was your first chance to build
| any wealth, you never had the option to diversify. I don't
| think it's fair in that case to blame the employee.
|
| I don't necessarily blame the management either. I do hope
| this reminds employees of private companies that their equity
| is only on paper until they are able to sell, and they should
| pressure management to give them the option.
| freewilly1040 wrote:
| The point is that in this case there was real wealth that
| could have been released had they done an IPO
| duxup wrote:
| If not for COVID-19?
|
| When should they have IPOed?
| dabeeeenster wrote:
| Maybe they could pay some UK corporation tax next
| exogeny wrote:
| If any iOS engineers from Airbnb are in this thread and looking
| for what's next, happy to chat. Email in bio.
| sjroot wrote:
| PSA your email is not actually in your bio.
| [deleted]
| hnxs wrote:
| Guessing most of their iOS teams will stay intact, but who
| knows.
| nopriorarrests wrote:
| >According to Chesky's missive, Airbnb anticipates its 2020
| revenue coming in under 50% of 2019's total
|
| Very optimistic. They should be happy to get around 25% of 2019
| totals.
| filoleg wrote:
| Once places open up in a few months, I expect a massive short-
| term surge in demand for AirBnB lodging.
|
| I know for a fact that by the end of summer (assuming places
| open up like planned), I will start traveling again. And I will
| be doing no less traveling this year than I would any other
| year. Of course, that won't be the case for everyone, but
| keeping that in mind, the 50% revenue drop seems like a pretty
| reasonable expectation.
| IkmoIkmo wrote:
| There's no vaccine yet. Given how many people are
| asymptomatic, I expect the virus to create a new wave in a
| business as usual scenario. I think people will be quite
| cautious, particularly in international travel. Local
| bookings should probably be higher than usual, foreign visits
| much lower than normal, but it's mostly foreign visits which
| drives airbnb worldwide as far as I know.
|
| Second I really wonder if things will open up as per usual.
| There's a lot of talk that we'll see things stay restrictive
| for the rest of the year. Many countries for example mandate
| face masks in public transport. Some countries mandate
| offices to fill to at most 50% capacity, mandating 6 feet of
| distance. There's many countries which expect that to be the
| norm once things like restaurants open again as well.
| Basically the current supermarket model: you can shop, but
| only 50% of the normal occupancy. We'll likely see this for
| busses, for stores, offices, museums, parks etc. I don't
| expect a massive short-term surge myself.
| ashconnor wrote:
| Our CEO emailed today we are work from home until September.
| I'm told Amazon tech are work from home until October.
|
| At this point I doubt I'll see my office in 2020. I
| definitely won't be travelling.
| filoleg wrote:
| Good for you. For us, it was announced as an optional WFH,
| entirely at the employee discretion (unless they are in a
| role that has hard requirements of being in the office,
| like hardware engineering), until October.
|
| To me, that sounds like a perfect opportunity to work
| remote on a nice beach during the day, and enjoy my time
| during the evening in a new place, without having to take
| days off for that. I get concerns of some people like you,
| and I am not trying to diminish your choice to stay at
| home. But your take on this is not representative of what
| everyone else will be doing (and neither is mine, hence why
| I expect AirBnB to still have that 50% revenue drop), so I
| wouldn't discount my original point based on that.
| nopriorarrests wrote:
| How many people will be okay staying in some location which
| is not properly disinfected, unlike a room in a chain hotel?
|
| How may hosts will me okay returning to their place knowing
| that some strangers were living there?
|
| Even if everything, including international flights, open up
| in autumn, I think people will prefer hotels for a long time.
|
| So, Airbnb had an average Q1, Q2 is dead in the water, Q3
| might bring, idk, 10-20% compared to 2019? and Q2, maybe 50%?
|
| Overall, I can hardly see 50% drop YoY.
| DrRobinson wrote:
| To be fair, that's under 50%
| corporateslave5 wrote:
| What isn't commonly known is that Airbnb has one of the most
| biased engineering hiring practices in the industry. Chinese
| individuals at the company regularly share interview questions
| through wechat groups. Preferring to hire their own. Extremely
| dishonest hiring culture is pervasive through engineering. Don't
| believe me? Look at their engineers on LinkedIn
| noad wrote:
| You know you don't have to emulate the awful boomer who gave
| you this shitty worldview. You can just stop, any time you
| want.
| actuator wrote:
| Please don't post messages like these, it doesn't really help
| with the discussion.
|
| Also, just because maybe they have more folks from one
| ethnicity than most companies have on average, doesn't prove
| this argument.
|
| Lastly, sites like Leetcode exist where people share questions
| too, I doubt that it is restricted to just one ethnicity.
| pedrosorio wrote:
| How is this relevant to the topic?
| actuator wrote:
| It feels bad that this happened to one of the companies with a
| very good engineering culture. The stuff they have put out in the
| open either on GitHub or through their blogs is a testament to
| that. I think any company will be lucky to have these folks.
| tempsy wrote:
| Good engineering culture...?
|
| Airbnb is a simple CRUD app...it's hardly a shining example of
| hard deeply technical engineering problems that are fun and
| interesting to work on.
| filoleg wrote:
| If you think they don't have a good engineering culture, you
| should check out their open-sourced tools[0].
|
| I had an opportunity to work with some of their open-sourced
| tools (Airflow was one of them) about 5 years ago at my old
| workplace, and the quality of their product and documentation
| is nothing but superb.
|
| At my current workplace, I use Enzyme all the time when
| dealing with unit tests, and it seems to be pretty much the
| industry standard for React UI unit-testing.
|
| 0. https://airbnb.io/projects/
| taway555 wrote:
| For a Linux user, you can already build such a system
| yourself quite trivially by getting an FTP account, mounting
| it locally with curlftpfs, and then using SVN or CVS on the
| mounted filesystem. From Windows or Mac, this FTP account
| could be accessed through built-in software.
| alfalfasprout wrote:
| There's a great deal of recommendations, fraud detection,
| global payment complexity, etc. behind the CRUD app.
| tempsy wrote:
| All solved problems. Or at the very least not problems
| other companies don't face as well.
| hn_throwaway_99 wrote:
| AirBnB was really a leader in these types of consumer-to-
| consumer payments. While AirBnB has also changed their
| strategy WRT their mobile apps, I think it's certainly
| commendable how they were leading with the technical
| approaches they took.
| xwdv wrote:
| Good engineering culture, bad company, user hostile.
| Apocryphon wrote:
| Dubious product quality:
|
| https://news.ycombinator.com/item?id=22810407
| nacho2sweet wrote:
| Finally some good covid news.
| [deleted]
| jerzyt wrote:
| Does anyone know what percentage of the call centers are not
| actual employees but contractors? The contractors are usually
| demand based, therefore "invisible" in these stats.
| godzillabrennus wrote:
| A lot of tech companies have relied on BPO (business process
| outsourcing) like TaskUs for call center workers.
|
| They try to take on fresh college graduates as employees in the
| Philippines for about $400/salary + benefits and try to resell
| them to companies as outsourced talent for about $1800/month.
| MattGaiser wrote:
| College graduates? For call centres?
| kube-system wrote:
| They can't all work at Starbucks :D
| subsubzero wrote:
| I know a few people who work over at airbnb, they are very
| generous with who they call an employee. Unless things have
| changed in the past year or so security guards and food
| staff(people who make meals onsite) are all full fledged
| employees who I assume get stock, I think this is awesome as
| a lot of these folks come from low income backgrounds and
| having full insurance and a extra bit of cash via salary and
| stock options goes a long way towards improving their lives.
| abhorrence wrote:
| Things have changed (unless they changed back). Food hasn't
| been in house for nearly two years. Only a small portion of
| customer support are direct employees. Most physical
| security was outsourced too.
| julesqs wrote:
| for everyone praising the severance package, laid off employees
| at kickstarter are getting even more severance and full
| healthcare (not COBRA) because they unionized:
| https://twitter.com/ksr_united/status/1256382357311012871
| zebnyc wrote:
| that is a pretty good severance. I was laid off from an ad-tech
| company based in SF in April and received 4 weeks of pay (I had
| worked there for almost 2 years)
| theaceoface wrote:
| That too is a generous severance. But the AirBnB severance is
| considerably more generous: Longer Severance (14 weeks + n vs
| 16 weeks) 1 year of Cobra vs 4 months Equity vs None
| pb7 wrote:
| Doesn't look like more to me. Roughly same salary duration
| (would bet a pretty penny that Kickstarter doesn't pay nearly
| as much as Airbnb to begin with), significantly less health
| insurance, nothing about equity. That's what a union came up
| with for such a microscopic layoff compared to Airbnb? Sounds
| like the free market is better off deciding these things.
| julesqs wrote:
| oh I might be confused about the COBRA situation actually. I
| can't tell if Airbnb is actually paying for COBRA.
|
| aside from that, assuming that non-engineers get paid better
| at Airbnb than elsewhere is a big assumption.
| pb7 wrote:
| Will agree on the point regarding non-engineers. I would
| bet all else being equal they do, but will not fight over
| it as it's just an educated guess.
|
| With regards to COBRA, the premiums are certainly covered
| by AirBnb as COBRA is available to employees for 18 months
| by default and 36 months in California where AirBnb is
| headquartered.
| julesqs wrote:
| right right, it was confusing to me that they mentioned
| COBRA but it does sound like Airbnb is paying, which is
| good.
| Apocryphon wrote:
| Not sure how relevant Airbnb equity really is at this point
| going forward.
| pb7 wrote:
| RSUs will always be worth something unless the company goes
| completely bankrupt. Judging by the stock prices of major
| hotel chains like Marriott and Hilton which serve as a
| rough guide, the equity is likely worth ~50% less now --
| certainly not irrelevant considering the offers were always
| considered generous to begin with.
| asdff wrote:
| Good. The faster Airbnb pulls out of my local housing market, the
| better for everyone else who lives here.
| ifeedmartians wrote:
| seriously wtf. 1900 people lost their jobs and you think that's
| "Good". Check yourself
| nojito wrote:
| airbnb has devastated large swaths of America.
| taurath wrote:
| Devastated housing costs which were on a decade long
| uptrend before AirBNB existed you mean? Or because its
| capitalized rentals to a higher extent than the normal
| purchase/rental market could do?
| b212 wrote:
| I'm wondering what's the ratio of IT folks to "others" in Airbnb,
| I suppose most of the workforce is customer service, human
| resources, legal and so forth? So maybe this cut won't touch
| engineering teams at all? After all dev teams can still do
| something during times like these (eg. trying to make other
| unicorns) but keeping big headcount in customer service is simply
| burning money...
| alfalfasprout wrote:
| Eng was hit hard-- particularly product-facing engineers.
| supernova87a wrote:
| If Airbnb is willing to pay 14 weeks (3.25 months) of severance,
| they must believe this is going to go on significantly longer
| than that. Or they're using this as an opportunity to cut
| underperformers at the same time.
|
| Because if they believed things would start to recover by fall,
| wouldn't you just pay the people as normal and make a judgement
| call around then? You're spending the payroll money either way --
| 14 weeks of severance and people stop working immediately, or 14
| weeks of payroll and people are still working.
| empath75 wrote:
| It's going to be _years_ before the travel industry recovers
| ashtonkem wrote:
| I personally suspect that travel related industries will be one
| of the last to recover, both due to consumer reticence and due
| to lower levels of disposable income during the recovery.
| toshk wrote:
| Maybe but Im guessing there will be 1 to 3 months flights are
| open in summer and there will be lots of crazy partying and
| spending. (in Europe)
| baxtr wrote:
| Oh yeah. I feel like there are going to be totally crazy
| parties popping up everywhere like there is no tomorrow.
| And then we will have a spike in births around Feb/Mar 2021
| ashtonkem wrote:
| Oh yeah, there'll be a baby boom, but it'll all be first
| born children.
| jdminhbg wrote:
| > lower levels of disposable income during the recovery.
|
| There's also going to be a lot of pent-up demand from people
| who didn't lose jobs and had no outlet for leisure spending
| during the quarantine. I'm not sure which will win out.
| remus wrote:
| On the other hand we're almost certainly heading for a
| recession so (you would hope) there would be some reticence
| to over spend on luxuries like holidays.
| JMTQp8lwXL wrote:
| The pandemic doesn't end simply because quarantine is
| lifted. People will seriously question flying or passing
| through airports, especially as case counts are getting
| worse while the restrictions are being lifted.
| jdminhbg wrote:
| But the pandemic ends eventually, one way or another. The
| question is what happens at that point: bacchanal or
| hermitage.
| ialyos wrote:
| But most people are capped to how much they'll spend on
| leisure by their vacation time. So there probably isn't
| much headroom to be gained for people who are regular
| travellers post this pandemic.
| jdminhbg wrote:
| Sure, but like vacation money, vacation time has also
| been curtailed. I'm currently not on a vacation I had
| previously planned and working instead, saving both time
| and money I would have otherwise spent.
| amiga_500 wrote:
| It's going to go on far, far longer than 14 weeks.
|
| Airbnb are going to have issues, as the longer this drags on,
| the more landlords are going to be forced to sell or commit to
| long-term rentals, limiting the number of eligible places, even
| if there is some later snap-back (due to say a very effective
| vaccine).
| notjustanymike wrote:
| Take any sane model of the virus and you'll see that we're
| headed for a rebound due to early re-opening of states. I'm
| starting to bet against this entire year at this point.
| llamataboot wrote:
| I mean, personally I think a year is a better time estimate for
| connectivity returning (and maybe 3+ for economic recovery) but
| you are also looking at some specifics to airbnb here - much of
| their growth was people converting long-term rentals to short-
| term rentals - many of those will either get locked back up in
| the long-term rental pool or go into foreclosure
|
| You also have the case that like stock prices employee hiring
| is often based on projections for anticipated need in a high-
| growth business - it's such a friction point, you are trying to
| stay ahead of the curve to build the capacity to grow now and
| handle that growth 12 months from now
| r00fus wrote:
| I have heard of people taking a luxury Airbnb near where they
| live for a month since kids can be remote from school along
| with parents, and I just don't trust hosts or previous guest
| enough to ensure that the place is clean.
| cactus2093 wrote:
| All indications at this point are that the virus spreads a
| lot more through the air than via surfaces. And it only stays
| active up to 3 days on plastic and metal surfaces, and that's
| in ideal conditions.
|
| If you bring cleaning supplies and just wipe down high-
| contact areas like counters, doorknobs, refrigerator handle,
| etc. when you arrive, it doesn't really seem any more risky
| than something like bringing in groceries from the grocery
| store, which may have been touched by other people, the
| cashier, etc. Or to be extremely cautious, you could pay for
| an extra 3 days prior to arriving to make sure nobody has
| touched anything in that time. If you're gonna be there a
| full month anyway, what's another 3 days added on to the
| cost.
| khalilravanna wrote:
| Depends. I'm a finance noob but I think there's a big
| difference from an accounting perspective to say "we have a big
| expense to pay for the next ~14 weeks" versus "we have a big
| yearly expense that will continue in perpetuity". I think this
| bookkeeping is especially important when looking for funding.
| Perhaps someone with more savvy and better articulation of the
| nuances can chime in here. (I'm interested myself on if I'm way
| off the mark here.)
| julianozen wrote:
| Airbnb employee, opinions are my own.
|
| You need to operate the company under the assumption that this
| will happen for a very long time, and that even afterwards
| people will think about travel differently
| iphone_elegance wrote:
| their specific market is going to be damaged for a long time
| chrischen wrote:
| Even if we "open up" the virus won't be gone and society will
| have to function in a cautious state to mitigate the spread of
| the virus still. Lockdown was simply the most extreme portion,
| but the rest of the mitigation efforts will still have to
| continue at least until a vaccine is available. This means the
| economy is not going to return to normal for a long time.
| sjg007 wrote:
| 12-18 months minimum, probably longer.
| SpicyLemonZest wrote:
| Underperformance is always relative to some degree. They most
| likely decided that much of the stuff that 25% is working on -
| the article mentions "experimental and costly endeavours" -
| won't be feasible even after the crisis is over and people book
| short-term rentals again.
| IkmoIkmo wrote:
| I think it's quite obvious that tourism isn't going to recover
| back to 100% where they were in 3 months, no...
|
| Note that '100%' includes the growth prospects that Airbnb
| still had in January 2020. 'startups' like airbnb hire for
| growth. 25% workforce cut is roughly the growth prospects
| (20-30% per year) that airbnb had last year.
|
| So no, that recovery won't come in just a few short months. For
| one because there's still a global pandemic related global
| lockdown. Second, because an effectively rolled-out vaccine is
| not expected until at least next year. Third because tourism is
| hardest hit in a normal economic crisis, in a recession and 20%
| unemployment figures like now, the first thing you stop doing
| is taking international trips for fun. Fourth because in a
| virus pandemic, tourism (concentrated populations gathering in
| hotspots like a museum, bus, airplane etc, and transporting the
| virus across borders) is a high-risk activity that gets
| restricted way more than other economic sectors like farming,
| manufacturing, or work from home office jobs. Fifth because
| most of airbnb's stock is caught up in one of two categories:
| people renting out their home when they're away on vacation,
| these people are staying home and aren't making their real
| estate available. Or professional airbnb companies which
| purchased real estate that's only economic with large revenues,
| financed with leveraged mortgages, many of these companies are
| set to collapse in a 3-month shutdown, let alone a 6-month low-
| activity industry. A lot of these will be folding and selling
| their properties. Both the demand side and supply side is going
| to take a hit, airbnb will run much less business for the next
| year at least and will need to bounce back. It won't be easy.
| Especially in an industry where you'll see dirt-cheap hotel
| prices competing for a few years.
| r00fus wrote:
| > Or professional airbnb companies which purchased real
| estate that's only economic with large revenues, financed
| with leveraged mortgages, many of these companies are set to
| collapse in a 3-month shutdown, let alone a 6-month low-
| activity industry. A lot of these will be folding and selling
| their properties.
|
| I wonder how this is or will impact the real-estate market?
| Are enough people going to foreclose without interested
| buyers that the market takes a plunge?
| jdhn wrote:
| This conversation has come up a lot in real estate circles.
| I think it depends on the debt load that people have, which
| means that more expensive places that have lots of Airbnb's
| will be hit the hardest. Anecdotally, my friend outright
| bought a house outside of Detroit to use as an Airbnb. With
| no mortgage to pay and property taxes low, he's deciding
| whether to wait it out until people start travelling again,
| or put it up for rent.
| afjl wrote:
| I think it's highly unlikely...but I'd be very happy to be
| wrong, too.
|
| These highly-leveraged "new" companies and individuals make
| up only a portion of AirBnB-rented homes, which themselves
| are only a small portion of the entire housing market.
| There was a very recent interview or article with AirBnB's
| CEO where he (I'm sure he was fudging the numbers a bit)
| said only 1/3 of AirBNB homes are actually owned by these
| kinds of speculative home-buyers. The remaining 2/3 are
| split evenly between traditional real estate leasing
| companies and homeowners with only 1 house.
|
| Also, worth considering that short-term rentals can easily
| be transformed back into long-term rentals. In any case, I
| think a national housing market plunge is highly unlikely.
| llamataboot wrote:
| 1/3 is not a small number in this equation though!
| afjl wrote:
| It is a small number compared to the entire housing
| market.
| moneywoes wrote:
| The number of available suites spiked in Vancouver after
| this announcement.
| atomic77 wrote:
| While I don't want to seem like I'm wishing unemployment or
| hardship on anyone, the implosion of Airbnb is already causing a
| rent price correction that was sorely needed in many cities that
| have become severely unaffordable.
|
| Wired published an article about this effect in London [1] and
| I've seen price drops as much as $500 for condos in the downtown
| core of Toronto on Zillow already.
|
| https://www.wired.co.uk/article/airbnb-coronavirus-london
| c3534l wrote:
| It's possible that while AirBnB increased demand for housing,
| the market could have responded by building and allocating more
| real estate to housing, resulting in an equilibrium. So it is
| at least _plausible_ to me that an implosion of AirBnB might be
| good for renters in the short term as there is an over-
| allocation of housing, but that without AirBnB, market rates
| will increase to about where they were before as supply drops
| over time in response. The whole thing is complicated enough
| that there 's no way I'm going to trust any single, non-
| academic article on the subject.
| nerfhammer wrote:
| I wonder if 30% unemployment might also have an effect on
| rental prices
| drstewart wrote:
| It's pretty bold to claim any and all price drops are directly
| attributable to Airbnb when in the middle of a recession
| causing pandemic that is heavily impacting normal
| housing/rental market activity.
| atomic77 wrote:
| I admit that both my observations, and the ones in the Wired
| article I cited, are anecdotal. And it's certainly not the
| only factor driving those rent decreases. But it's oddly
| coincidental that the biggest and most immediate price drops
| seem to be concentrated in the areas that had the most Airbnb
| listings, at least based on what i've looked at in Toronto.
| jdm2212 wrote:
| Desirable areas have lots of demand for both regular
| apartments and places for tourists to stay.
| garyclarke27 wrote:
| Was a mystery to me why they waited so long to do an IPO. They
| must be kicking themselves now, will be a long long time, before
| they can match the kind of cash they could have raised anytime in
| 2019.
| moneywoes wrote:
| Are we aware how many engineers were affected?
| nsxwolf wrote:
| My initial reaction is "wow, nice severance package!" My
| secondary reaction is they must think things are going to be very
| bad for a very long time for this kind of payout to make sense
| financially.
| tempsy wrote:
| Depending on the role not everyone is going to have an easy
| time finding another job. Technical roles sure but areas like
| marketing and recruiting no.
| jlbnjmn wrote:
| Good point. If they're wanting to part ways with 25% of the
| workforce now, covering 3 months of full salary and 12 months
| of expensive healthcare, they must be expecting fundamental
| market shifts.
|
| Also, the debt they took on may have been partly to cover these
| lavish severance packages while also extending the runway.
|
| And yes, this is extremely lavish. Paying severance that
| appears roughly equal to the median annual income in the USA.
| b212 wrote:
| "Good point. If they're wanting to part ways with 25% of the
| workforce now, covering 3 months of full salary and 12 months
| of expensive healthcare, they must be expecting fundamental
| market shifts."
|
| Why? Can't they rehire the people they laid off during this
| period?
| jlbnjmn wrote:
| After rereading the article, it appears the layoffs are
| isolated to side projects. So it looks like just a healthy
| focus on the actual business.
|
| And for everyone previously asking why they needed so many
| employees, the answer is apparently they didn't.
| dickjocke wrote:
| Just because they've cut these projects or they're not
| generating revenue today doesn't mean they don't "need"
| them. What if the economy tanked in 2007 and Amazon
| decided to dissolve AWS?
| beagle3 wrote:
| It is generous by US standards, but it's just nice for many
| other western countries, where the _standard_ is a few months
| of salary, or e.g. one month salary for each year worked
| (that is, if you had worked for the company for 5 years, you
| get at least 5 months salary on termination -- Israel
| mandates that one by law, for example, and NOT paying it is
| considered a criminal violation performed by the employer)
| beagle3 wrote:
| Wow. This is my comment most downvoted in history, and I
| would really appreciate an explanation why from someone who
| understands why (no hard feelings, I don't care about
| internet/brownie points, but the reason I'm here on HN is
| to learn and downvotes only help me figure out that someone
| thinks I'm wrong, not why).
|
| If you think this is factually wrong, please point out why.
| If you think it's stupid (even though it is not factually
| wrong), I would also appreciate an explanation why.
| tjs8rj wrote:
| Don't get the idea that those are free lunches. They are
| factored as an expected value in your total compensation
| for sure. It's part of the reason that median incomes in
| the US are much higher than Europe and everywhere else:
| less benefits requires higher cash compensation for the
| same marginal product.
| beagle3 wrote:
| There are no free lunches. But do note that this is also
| factored in into AirBNB's/Google/FB/IBMs/Microsoft's
| compensation as well; They could have paid everyone more
| and let them save for themselves, but -- like healthcare
| -- factor it into the "employer's cost" of which
| "visible" salary+RSU+ISO+bonus is only a part (70-90%
| depending on many factors).
|
| The main difference is that in the US it is optional, so
| only the well-to-do employers and only at good-enough-
| time do it -- so the expected costs are weighted by the
| probability they will do them (say, 30% - I'm sure they
| have a good idea) -- and they can bail out at the last
| second if conditions are unfavorable for them to do that.
|
| In Europe the systems mostly mandate it. The difference
| is more striking with respect to pensions paid on
| retirement - they are "optional" for the employer in the
| sense that they could (and are) discharged in bankruptcy,
| meaning that after 40 years of employment, one bankruptcy
| event (we'll see many after the lockdown) is all it takes
| to deny those payments.
|
| There are no free lunches, indeed - the cost of higher US
| salaries are unpredictable (and often unfavorable) future
| cash flows for employees -- and only in some industries
| are the salaries high enough to actually allow the
| employees to prepare for that.
|
| edit: I've heard someone describe these forcefully-
| ensured severance and retirement funds as "denying one
| the ability to steal from their future selves". I think
| that's an apt description of what it is.
| chillacy wrote:
| To put some numbers on that, AirBNB compensation is no
| joke. They're paying senior engineers 200k+ base and
| nearly 200k stock. https://www.levels.fyi/SE/Airbnb
|
| I have (regrettably) not found many companies in other
| countries which pay that well, except maybe Google
| Zurich, which is hard to get in I hear.
| beagle3 wrote:
| Link 404s for me. Do you know how many of their employees
| are in that range? And especially how many of those being
| let go are in that range?
| ProAm wrote:
| I called this 3 weeks [1] ago and no one believed me. Were are
| going to see A LOT of this the next 3-4 months as large companies
| experience bad quarters. These are the companies that were setup
| and run well (i.e. not day to day, burning stacks of money with
| no revenue).
|
| [1] https://news.ycombinator.com/item?id=22901720
| random42 wrote:
| Such an odd 'I told you so' comment in a thread about thousands
| losing their livelihood.
| ProAm wrote:
| I guess I was bitter because of the argument I got when
| originally discussing it on HN. I do feel validated. It sucks
| for these employees but everyone working for a VC fueled
| startup lives in this same boat. They had to know at any
| moment they might get tossed overboard, they were going to
| have layoffs prior to IPO as is.
|
| And AirBNB has caused plenty of strife in the communities
| they operate in over the years, impact is always relative to
| ones perspective.
| banads wrote:
| Now is a terrible time to be gloating about such things.
| [deleted]
| ThisIsTheWay wrote:
| MANY people called this, especially after they announced salary
| reductions at the top over a month ago. [0] This is not at all
| a surprise or unexpected.
|
| https://www.inman.com/2020/03/30/airbnb-announces-drastic-co...
| ping_pong wrote:
| I'm shocked that 2020 revenues will come in only 50% below 2019.
| I don't think anyone will be travelling for the bulk of this
| year, especially with the looming threat of potentially getting
| sick in a foreign country or away from your home.
|
| It will take 5+ years for them to get back the same level of
| inventory/hosts/customers as they had in 2019. Many hosts will
| foreclose on their rented properties during 2020 or convert to
| long-term rentals. Airbnb may lost inventory for multiple years,
| not just months.
|
| The second wave will be the nail in the coffin for a lot of
| companies, I think Airbnb is one of them unfortunately.
| tootie wrote:
| I have no idea how big this market is, but I know some people
| who have fled COVID cities like NYC to spend 2 months in an
| Airbnb house with a backyard.
| francisofascii wrote:
| Travel to cities is certainly done for a while. Travelling to
| rural areas might still have a chance. I have heard of families
| getting away to cabins in the woods where no human contact was
| needed. (Of course whether or not that should be allowed is a
| different conversation.)
| eganist wrote:
| > I'm shocked that 2020 revenues will come in only 50% below
| 2019
|
| This is a fair point, but it also suggests strongly that a
| significant minority of their business is month to month
| rentals, possibly in place of leasing.
|
| And hey, being frank, I wouldn't mind considering going
| somewhere else for a few months now that I can work remotely
| for a while.
| blast wrote:
| > a significant minority of their business is month to month
| rentals
|
| I was wondering about that too. My next-door neighbors
| vacated their place when the lockdown started, but someone
| else has been living there. Since they often rent their place
| on Airbnb for weekends, my assumption has been that this is
| another Airbnb renter. She's been there for over a month now.
| [deleted]
| newhouseb wrote:
| I have no real data, but anecdotally a large number of my
| peer group (tech folks in NYC) fled the NY Metro Area in
| March. Those who had (not at-risk) family nearby stayed with
| family, while others (like myself and my partner) are
| quarantined in Airbnbs in more remote areas (although still
| close to a functioning medical system).
|
| It's costing us an arm and a leg, but we've been very
| fortunate in that we can afford it. We normally live in a
| high-traffic apartment building with multiple dogs that
| require walks, so exposure seemed likely (and indeed a
| doorman later tested positive).
| ping_pong wrote:
| I would too, but the thing holding me back is if the shit
| hits the fan, and I need to do something like buy a freezer
| to store extra food, I can't conveniently do that in an
| Airbnb. And if I somehow get sick, I'm at the mercy of the
| doctors and hospitals in this foreign land. I'd rather be in
| my own home with the doctors and hospital system that I'm
| familiar with. I think more than 50% of people feel this way,
| which is why I think a 50% cut in revenue is too little, I
| would say its more like an 80-85% cut in revenue. This is
| catastrophic for Airbnb.
| speby wrote:
| If shit hits the fan, there won't be freezers to be
| bought... they'll get panic purchased instantaneously and,
| if you did manage to find one for sale, expect it to cost
| multiple times what you otherwise might have paid.
| ping_pong wrote:
| I think you're missing my point.
| uptown wrote:
| FYI - They're already gone.
| drewnick wrote:
| Yep. Ordered a freezer in March from Costco, delivery
| scheduled for June.
| r00fus wrote:
| Jeebus how is this possible - is our supply chain that
| fragile that things like hand sanitizer (that you can
| make with alcohol + aloe gel) and freezers run out?
|
| Why is there no increased demand-driven supply on these
| things?
| hilbertseries wrote:
| There are plenty of places where you can buy hand
| sanitizer currently. Any sort of manufacturing takes time
| to ramp up. There's a usual demand for freezers and
| that's how much is typically made. If everyone decides
| they want a freezer there's not enough. Why is this
| surprising? Sure they may start manufacturing more
| freezers now, but it's going to take time and it's not
| clear if demand will stay high, so who knows how much
| will be made. These things continue to be made, so our
| supply chain is not breaking, it just can't massively
| scale up production instantly. I don't know why this
| would be surprising.
| alephnan wrote:
| > I'm at the mercy of the doctors and hospitals in this
| foreign land
|
| That's where you can carefully pick the foreign land whose
| medical system you trust more than your own home country
| ping_pong wrote:
| That would mean that a lot of people would avoid going to
| the US or other countries where health care is
| complicated and/or expensive. And I would harbor a guess
| that travel insurance companies will put in anti-pandemic
| clauses going forward. That has already started by the
| way, so who knows what insurers will cover in late 2020.
| mycall wrote:
| > This is catastrophic for Airbnb.
|
| They have a functional system. If they can maintain it
| going on the cheap, they can pull themselves back up.
| Still, this gives times for alternatives to come and drink
| their milkshake.
| ping_pong wrote:
| They do have functional infrastructure but their business
| is suffering a catstrophic shift. As I mention, a lot of
| the hosts are either going to go into foreclosure or they
| will convert to long term rentals. A lot of people were
| buying condos and converting them to Airbnb because the
| revenues were so predictable. That won't happen in 2020
| and 2021. It will take many years for inventory to come
| back up to 2019 levels and less inventory means less
| revenues, even if people started to travel again, which
| also is unlikely in the next couple of years.
| mikeg8 wrote:
| I think it's highly unlikely that an upstart is going to
| steal a noticeable amount of market share from AirBnb
| during this pandemic. It would be hard enough during
| normal times when travel volume is much higher.
| eertami wrote:
| >I wouldn't mind considering going somewhere else for a few
| months now that I can work remotely for a while.
|
| So... you want to take a holiday during a global pandemic?
| tempsy wrote:
| I mean it's just a forecast. I don't think it will bounce back
| as quickly as they are forecasting, though.
| psadri wrote:
| People may "travel" within their local area.
| grecy wrote:
| You might be surprized how many people are "stuck" around the
| world right now, and are staying in Air B N B's waiting for all
| the closures to end.
|
| For example Argentina has cancelled ALL plane flights (in/out
| and domestic) until September.. and unless you have signed
| authority you can't even drive town to town. So anyone that was
| travelling there is now stuck, and are essentially forced to
| rent a place and stay put.
|
| A few friends are caught there, and many others in similar
| situations around the world.
| kaybe wrote:
| So Germany basically collected all its citizens that could be
| found (and that wanted to) around the world back home last
| month, including chartered airplanes and special permission
| organized for them to travel to the airport (~200.000
| people).
|
| Is that unusual?
|
| https://de.wikipedia.org/wiki/COVID-19-R%C3%BCckholprogramm_.
| ..
| taurath wrote:
| I have a potential theory of future revenue for them - as "work
| from home" becomes more accepted and popular, working vacations
| or nomadding even within the united states will become a lot
| more popular for couples looking to get away, singles looking
| for new locations to try out and even families on trips.
|
| There's been this sweet spot with AirBNB where you can rent a
| place for 1-2 months for a relatively small monthly premium
| over a 12-month lease that I've been planning to take full
| advantage of this year, already having been remote. A lot of
| AirBNB hosts have started preferring these sorts of
| arrangements because people are less likely to cause trouble. I
| can't help but think the AirBNB that replaces hotels might drop
| by a lot, but the mid-term monthly rentals might bounce back a
| lot quicker as people become less location dependent on work. I
| know I absolutely am planning to go somewhere warmer in the
| winter months.
|
| There's still a huge opportunity in a hassle free monthly
| rental experience. Month to month through almost any legacy
| property management company is an absolutely dreadful
| experience with huge up front deposits and being treated
| basically like a criminal. I have no idea how big this market
| is admittedly but its been a very interesting value prop for
| me.
| rrrrrrrrrrrryan wrote:
| I think they're going to poach a ton of business away from
| hotels once things start opening back up. It's way easier to
| maintain social distance in an AirBnb (hotels have check-in
| processes, hallways where you have to pass other guests, etc),
| and I think more people will be travelling to rural areas where
| Airbnbs have an advantage.
| darkwizard42 wrote:
| Yeah but do you trust someone to sanitize their home properly
| after the previous guest or would you trust a hotel to do
| that correctly? Thats the question my friend circle has been
| thinking about...
| rrrrrrrrrrrryan wrote:
| They're probably about the same in my mind, but I have
| nothing other than my gut instinct to back this up.
|
| Family-owned restaurants can be clean or dirty, and a
| corporate chain can be clean or dirty too.
| [deleted]
| cbhl wrote:
| I was under the impression they were pivoting rather hard into
| events, to diversify their income streams?
| ping_pong wrote:
| What sort of events would be taking place at this point? I
| have a friend who works in conferences, and he said his
| business is 0 now.
| ThisIsTheWay wrote:
| I don't understand how AirBnB can pivot to events - the
| locations managed through their site tend to be quite
| small... Can you clarify?
| mrkramer wrote:
| I think he was referring to "Experiences" section on Airbnb
| where you can go surfing, kayaking and stuff like that.
| ThisIsTheWay wrote:
| Ah got it, thanks for the clarification. Might be a good
| way to backfill a portion of lost revenue, but I still
| don't think travel is going to pick up in Q3/Q4 as much
| as AirBnB is forecasting.
|
| Only time will tell.
| jedberg wrote:
| I was too, but I have a few friends who own multiple AirBnBs.
| They are all fully booked with long term renters. Some of them
| were forced to stay because they have nowhere to go.
|
| So I guess it isn't quite as bad as you'd imagine. I'd guess
| the purely vacation rentals are suffering, but the ones that
| were typically business renters could be converted to long
| term.
| mrkramer wrote:
| Airbnb is dead, long live Airbnb. Somebody else will take their
| place but I'm wondering how publicly traded companies like
| Booking and Expedia are going to handle this crisis.
| blueblisters wrote:
| Is there any early data on current AirBnB price trends in key
| markets?
|
| I was looking at some listings in Amsterdam and the prices
| _seem_ really cheap for a weekend at the end of this month.
|
| The inventory seems fairly limited, however. Perhaps hosts are
| already pulling their properties off the short-term market.
| vzidex wrote:
| Hosts definitely are pulling properties already - based off
| stories I've heard/read, many AirBNB hosts were/are
| overleveraged on their properties and have had to sell or
| convert to long-term now that their income has dried up, to
| avoid defaulting.
|
| Further anecdotally, I've been closely following the rental
| market in my city because I'm looking for a long-term place
| for August. There's been a noticeable drop in prices, and
| _huge_ quantities of listings in buildings that were
| notorious for being "AirBNB hotels". Furthermore, lots of
| listings are obviously ex-AirBNB units - tells include being
| only available furnished, only available for ~4 month
| rentals, descriptions that include "Perfect for your next
| stay!" or words to that effect, and my favourite: hotel-style
| "No smoking" cards caught in the listing photos.
| vmception wrote:
| Aw and you went to coding school to learn Ruby of Rails for the
| IPO and are now stuck with an irrelevant skillset.
|
| AirBnB is the only reason the bay area uses Ruby. All those
| startups stuck maintaining old code bases can only find talent
| because of attrition or rejects from AirBnB.
| Panini_Jones wrote:
| Doesn't Airbnb use Ruby because Twitter uses Ruby?
| spbaar wrote:
| Stripe, Doordash, Gusto, Flexport, Shopify
| saadalem wrote:
| At least they aren't doing it the wrong way, like when some big
| companies need to clean house a bit, they move the office to a
| new location quite distant from the current one. In the process
| they reduce the office size from 50,000 seats to 30,000 because
| they've estimated that amount of people will resign rather than
| endure a 4 hours commute... But officially :
|
| > totally you still have your job if you want, we are not laying
| you off, but I need you in the office everyday... Or you could
| resign if you don't like the new location...
| rootedbox wrote:
| Does anyone want to sleep at someone else's house they don't
| know??? At least not until there is a vaccine??
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