Online bookings platform Airbnb has confirmed that it will conduct a massive employee cut.

Earlier this week, the company sent a note via email to its workers, explaining that the coronavirus pandemic has hurt its business significantly over the past few months. In a bid to stay afloat, the firm has decided to reduce its worker count.

Bleak Times Ahead for Airbnb

Airbnb CEO Brian Chesky explained in the note that stay-at-home orders had led to mass cancellations of reservations and bookings across the country.

He also gave a bleak outlook of the future, explaining that the country’s gradual reopening process means it will take a while for things to return to normal. According to Chesky in the memo,

We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.

The Silicon Valley company currently has between 7,000-7,500 employees. In his note, Chesky confirmed that they would lay off 1,900 of them — a staggering 25 percent.

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Reports estimate that the layoffs could save Airbnb between $400 million-$500 million annually. [Upnewsinfo] Chesky pointed out that the effects of this virus will not be temporary for the firm.

Airbnb’s Strategy to Stay Afloat

Like several companies in the hospitality business, Airbnb’s operations have grounded to a halt since the virus broke out. In March, statistics from analytics firm Airdna confirmed that the company’s revenues across Europe had plunged markedly as a result of a drop in tourism and travel.

At the time, the data showed that daily reservations across cities like Seoul, Milan, Rome, and Beijing had plunged. The Chinese capital was the worst hit, with Airbnb bookings dropping by as much as 96 percent. Reservations reportedly dropped from 40,500 in the first week of January to 1,555 in March 2020.

Airdna published the report the same week that President Trump banned trips to other countries and cities began to issue stay-at-home orders. With major cities like Chicago and San Francisco on lockdown, Airbnb’s metrics began to slide.

The company also pushed back its plan to float an IPO, as the blowback from the coronavirus was too much for the firm to handle. [Financial Times]

Since then, the company has been busy trying to revive its business. Last month, Airbnb revealed it would earmark $250 million to refund guests and hosts whose reservations and profits had been affected by the pandemic. [Bloomberg] The online booking platform also secured a $1 billion lifeline from two venture capital firms — a move that reportedly cut its valuation by 40 percent.