Airbnb Cofounder’s Letter: The Better Way to Deliver Bad News to Employees

By | Abhijit Bhaduri |Keynote speaker, Author and Columnist

Airbnb CoFounder Brian Chesky is running a business that has been pulverized by Covid. These are also situations when leaders create playbooks that inspire.

Structural shifts in businesses

“Travel makes one modest. You see what a tiny place you occupy in the world.” Flaubert’s line describes the state of the sector that has been the worst hit by the pandemic.

People travel for different reasons-to discover themselves or to explore their relationship with the world. Today people have various reasons not to travel. Travellers fear their safety and the uncertainty of getting quarantined in their destinations or on the way back. It is causing a structural shift in the sector.

The collapse of travel and hospitality

Most nations have closed their borders to nonresidents, and even if you do manage to get through, you’ll likely face a two-week quarantine. Avoiding travel on cruise ships as part of the standard advisory by most countries. Every airline is struggling. The second-order impact is equally severe. GE is cutting roughly 13,000 jobs in its jet-engine business.

Airbnb had to deal with the angry “hosts” who let out their homes to travellers. The startup that was born during the downturn in 2008 is facing another tectonic shift. Global travel revenue in 2020 is a fraction of what it was in 2019. The tsunami of cancellations tore apart their business model and the company’s relationship of the hosts. Airbnb sided with the guests when it came to cancellations for bookings made before March 14, directing owners to issue refunds even if they were in the penalty window. Airbnb had to rethink its plans for going public. The disrupter has got disrupted – at least for the moment. Travel is likely to look very different even when it returns.

Should Airbnb side with travellers or the hosts? Here is how it actually happened <listen>

The Airbnb letter has become a template

Many business owners have to communicate bad news to their employees. From putting them on reduced pay, furlough to letting them go. Relationships and hopes built over time, get snapped. Nothing can heal the trauma of a job loss but communicating how to help someone land on their feet is essential. 

The Airbnb CEO and co-founder’s letter to the employees has become a template for several leaders. 

“All layoffs are sad, but there is a right way and a wrong way to do it. Airbnb co-founder and CEO Brian Chesky did it the right way.” – INC

There are three main reasons. First, the structure of the letter tells them, employees, what matters. “I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next.” 

1.      Share the reason for the decision

Explaining that the shift in the travel industry is structural, and the layoffs are in line with the changes Airbnb has to make to its strategy. 

2.      Guiding principles make it fair

Sharing guiding principles lets people evaluate the decisions against the principles and know it was fair.

·         Map all reductions to our future business strategy and the capabilities we will need.

·         Do as much as we can for those who are impacted. 

·         Be unwavering in our commitment to diversity. 

·         Optimise for 1:1 communication for those impacted. 

·         Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse.  

3.      Help them find their next opportunity

Beyond severance pay and vesting of shares, Airbnb did a few things that help employees find opportunities

·         Launching a public-facing website to help those leaving, find new jobs. It tells the next employer that the separation was not due to poor performance.

·         Leveraging the organisation’s Talent Acquisition (TA) team to help the impacted employees find new assignments. Doing it through the TA adds credibility to the job seeker.

·         Appointing an outplacement firm to help with career transition and job placement. An outplacement firm can help with resume writing, confidence-building, interview coaching and smoothens the transition. Outplacements are the way to go. Airbnb tied up with a top notch outplacement firm RiseSmart 

·         Leverage the employee’s network to find opportunities

·         Letting departing people keep their office laptops is a powerful gesture of goodwill.

During the slowdown, many leaders will face an unfortunate moment when they have to decide to let go of their colleagues. Communicating their intent authentically is a powerful signal not just to the departing employees but to the ones staying back. Net Promoter Score (NPS) measures how likely your customers are to recommend your business to a friend.

During these difficult times, leaders must seek an NPS Score from the departing employees.

Republished with permission and originally published at www.abhijitbhaduri.com