How Airbnb survived crisis in 2020 — The Longest Year

In May, Airbnb CEO and co-founder Brian Chesky announced that the company needed to lay off a quarter of its workforce—over 1,900 people—due to the impact of the Covid pandemic.

Announcing the news in a message emailed to all staff and later posted on the company blog, Chesky said:

“This is my seventh time talking to you from my house. Each time we’ve talked, I’ve shared good news and bad news, but today I have to share some very sad news. When you’ve asked me about layoffs, I’ve said that nothing is off the table. Today, I must confirm that we are reducing the size of the Airbnb workforce.”

He explained the rationale and said that he was unsure when travel would return and that when it does, that it would be different.

He spoke about the principles that guided the decision, including transparency, which aligned with the core values of Airbnb. He also outlined detail of severance, equity, and the healthcare benefits for those leaving the business.

The note went even further. While announcing the news, he offered an unusual severance benefit: Chesky said he wanted to help departing employees find new jobs by launching an opt-in “alumni talent directory” with their profiles, CVs, and work experience details.

He promised that Airbnb would redeploy a “significant portion” of its recruiters to spend the rest of the year helping the 1,900 laid-off employees find a new place to work. Shortly afterwards, in a statement by Airbnb’s vice president of employee experience, Beth Axelrod, it was reported that the directory had already been viewed 350,000 times, with significant interest from tech giants, smaller start-ups, and companies in other industries.

The news and content of Chesky’s note was shared broadly, analysed by media, and well received, it would seem, by employees. It quickly set the bar for managing staff layoffs.

The perks of an open door

While it was clearly a very difficult decision to take, Chesky showed real empathy. He was truthful, honest, and transparent.

He was quick and upfront in addressing the news. He provided clarity about what was happening and what was to come next and when. Before sending his mail, he had managed expectations: when asked about layoffs previously, he said that “nothing was off the table”.

He showed vulnerability in admitting to not having all the answers. He was firm: he strategised and implemented a plan to support those leaving the business with next steps firmly laid out— there was no room for negotiation.

All internal communications, particularly significant corporate news such as job cuts, get leaked eventually. By publishing it on the Airbnb website, Chesky ensured that the message and facts were communicated externally in full, allowing him to own the narrative and avoid speculation.

He also exemplified the company’s employer brand. His open approach succeeded in maintaining the company’s reputation and gave onlookers a sense of the values and culture of Airbnb.

Silence is Goldman

While companies like Airbnb have been applauded for their actions, others have fallen foul of the public and their own teams. That’s a precarious position to be in when you’re trying to protect your people and your business in a pandemic.

Strategy and communications, particularly internal communications, are central to managing a crisis. Knowing the risks, having the processes in place to reduce and mitigate them, and implementing a clear communications plan through established channels ensure you can communicate with your team effectively and efficiently, minimising or even preventing damage.

Take JPMorgan Chase and Goldman Sachs, both of which came under pressure for their Covid communication policies and procedures. Many news outlets, including CNBC, reported the banks’ employees learned of Covid cases in their buildings from press reports and not from their bosses.

The banks’ approach was to “inform only those who have been on the floor or who may have had contact with a sick person”. When questioned on this, the companies declined to comment.

JPMorgan has been among the bravest banks in bringing employees back to work in physical offices. CEO Jamie Dimon has spoken about the consequences and concerns associated with extended remote working.

Whatever the reasoning, the JPMorgan and Goldman Sachs approach did little to instil confidence in their people or teams that the company was listening to their concerns, cared much about the risk of Covid, or that their offices was safe.

At a time of acute public health and business risk, CEOs must exercise firm leadership. This starts with their number one asset: their people. Leaders who prioritise employee welfare, show empathy, and provide clarity succeed in keeping teams motivated and empowered.

Preparedness is rooted in culture

The best internal communications strategies are rooted in an open, collaborative, and transparent culture. This allows companies to build up the goodwill they need to endure challenging periods.

Airbnb, with an open culture grounded in clearly articulated values, mounted an intelligent communications response to a serious crisis. Goldman Sachs and JPMorgan Chase, on the other hand, appeared dismissive of employee concerns and disinclined to have a level, transparent dialogue with them.

Here’s what you can take from both scenarios:

• You don’t know what’s around the corner, so always be prepared: audit your business and review your practices and processes. This will uncover where you may be vulnerable, allowing you to put a plan in place to reduce and mitigate risk and seize opportunity. This review should look at your people, processes, and products with clear actions points to address challenges and improvements.
• With every crisis comes opportunity. Invest in your internal audience through an internal communications plan. Keeping your team informed and engaged will cultivate loyalty, empower, and motivate, ensuring you have a dedicated team of company ambassadors. Your people are your greatest asset. They pay the bills and keep the lights on.
• A crisis can make or break a company. An intelligent response can minimise the damage and even put it an advantageous position. However, if you are slow to respond, non-transparent in how you address the issues, and limited in your communications channels, then be prepared for a day of reckoning.