Leaders are forged in a crisis … Jacinda Ardern and Mette Frederiksen to Kevin Johnson and Brian Chesky … through empathy, clarity and trust

May 26, 2020

Leaders are forged in times of crisis.

Most obviously we have seen the soaring leadership of Jacinda Ardern, Mette Frederiksen and Tsai Ing-wen as they calmly guided their nations – New Zealand, Denmark and Taiwan – through uncertainty. And we have seen the chaos of Boris Johnson, Jair Bolsonaro and Donald Trump as they dithered and delayed, blamed others and created confusion, and the consequences for their nations – UK, Brazil and USA – with some of the highest death tolls.

3 women, and 3 men … Maybe the distinction is already clear?

New organisations, new innovations, new projects are forged in a crisis too. 57% of all companies in the Fortune 500 were founded in downturns – as entrepreneurs and business leaders step up to not just survive but look ahead in a crisis. How CEOs respond to Covid-19 will shape our loyalty for some time to come. Handle this well and you’ll build respect and loyal customers. Handle it poorly, and you and your business may not survive the year.

Some key themes have emerged: empathy, clarity, honesty, decisiveness, humility, calmness, reassurance, togetherness and making progress.

Customers and shareholders will quickly revolt against a company that fails to be empathetic with human priorities, to put customers and employees first, their health and safety. They won’t even listen to anything else if this doesn’t comes first. People want to hear human not corporate speak. Thoughtful humility, not slick rhetoric. Companies need to communicate in a personal, authentic and even vulnerable way. Use stories, specific examples. We’re in this together and communications should come across that way. Small gestures matter too – like saying that its ok to take days off if you feel unwell, or need to care for others. “Nobody is counting days” said Dan Glaser, CEO Marsh & McLennan.

Here are some more examples of letters from CEO to their people in recent months. All men, I’m afraid, but still with a strikingly familiar style:

Kevin Johnson, CEO of Starbucks: 

“As I write to you on this beautiful spring day in Seattle, I am reflecting on the fragility of the human experience. Six months ago, who could have predicted the world would be united in a common cause: overcoming the human impacts of COVID-19 – the loss of life, feelings of isolation and loneliness, concerns about health and fears of economic uncertainty. But here we are, navigating this together. During times of adversity, values are tested. I remain inspired by your resilience and am optimistic that together we can overcome this challenge. Words cannot capture the immense pride and gratitude I have for you, my Starbucks partners, as you demonstrate support for one another, your customers and the thousands of communities we serve.”

Mark Schneider, CEO of Nestle: 

“First and foremost, we would like to thank you for what you have done already to weather this crisis and to get our company prepared to cope with this situation. Your commitment makes all the difference. We would also like to reassure you that as a company we are resilient. Over the course of 154 years, we have seen – and mastered – many challenging moments. We are convinced that we will overcome this one too. And we would like to remind you of the special responsibility that a company like ours has at this time. Food and beverage products are essential to peoples’ lives. In moments like these our purpose and values matter a lot to the people and communities we serve.

It is in times of crisis that heroes are born. In all modesty, we want Nestlé’s values to shine at this difficult hour. We earnestly and humbly request all of you to contribute to this. This is the moment for extra effort, for going the extra mile. I fully recognize we are asking a lot because all of us are also busy managing challenging personal and family situations at this moment. Your effort will make a huge difference to our company and to our society. We would like to recognize in particular our frontline employees and factory workers – your commitment and your discipline are critical at this time to maintain business continuity. It is our priority to support you in this important endeavor.

Jeff Bezos, Founder and CEO of Amazon: 

“One thing we’ve learned from the COVID-19 crisis is how important Amazon has become to our customers. We want you to know we take this responsibility seriously, and we’re proud of the work our teams are doing to help customers through this difficult time. I am extremely grateful to my fellow Amazonians for all the grit and ingenuity they are showing as we move through this. You can count on all of us to look beyond the immediate crisis for insights and lessons and how to apply them going forward.

My own time and thinking is now wholly focused on COVID-19 and on how Amazon can best play its role. I want you to know Amazon will continue to do its part, and we won’t stop looking for new opportunities to help.

There is no instruction manual for how to feel at a time like this, and I know this causes stress for everyone. My list of worries right now — like yours I’m sure — is long: from my own children, parents, family, friends, to the safety of you, my colleagues, to those who are already very sick, and to the real harm that will be caused by the economic fallout across our communities. Please take care of yourselves and your loved ones. I know that we’re going to get through this, together.”

Larry Fink, Chairman and CEO of BlackRock: 

“When I originally sat down to write this letter, I was in my office, thinking about how to describe the events of 2019 and what BlackRock achieved last year. Today that seems a distant reality. BlackRock’s offices globally are nearly empty and instead, I write to you in isolation from home, like millions of other people. Since January, the coronavirus has overtaken our lives and transformed our world, presenting an unprecedented medical, economic and human challenge. The implications of the coronavirus outbreak for every nation and for our clients, employees and shareholders are profound, and they will reverberate for years to come.”

Brian Chesky, Co-founder and CEO, Airbnb: 

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. For a company like us whose mission is centered around belonging, this is incredibly difficult to confront, and it will be even harder for those who have to leave Airbnb. 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. 

Let me start with how we arrived at this decision. 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. In response, we raised $2 billion in capital and dramatically cut costs that touched nearly every corner of Airbnb. 

While these actions were necessary, it became clear that we would have to go further when we faced two hard truths:

  1. We don’t know exactly when travel will return. 
  2. When travel does return, it will look different. 

While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy. 

Out of our 7,500 Airbnb employees, nearly 1,900 teammates will have to leave Airbnb, comprising around 25% of our company. Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business. 

A more focused business 

Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection. This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences. 

This means that we will need to reduce our investment in activities that do not directly support the core of our host community. We are pausing our efforts in Transportation and Airbnb Studios, and we have to scale back our investments in Hotels and Lux. 

These decisions are not a reflection of the work from people on these teams, and it does not mean everyone on these teams will be leaving us. Additionally, teams across all of Airbnb will be impacted. Many teams will be reduced in size based on how well they map to where Airbnb is headed.

How we approached reductions 

It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:

  • 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. 
  • Optimize 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. 

I have done my best to stay true to these principles.    

Process for making reductions 

Our process started with creating a more focused business strategy built on a sustainable cost model. We assessed how each team mapped to our new strategy, and we determined the size and shape of each team going forward. We then did a comprehensive review of every team member and made decisions based on critical skills, and how well those skills matched our future business needs. 

The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. 

To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way. 

Severance

Employees in the US will receive 14 weeks of base pay, plus one additional week for every year at Airbnb. Tenure will be rounded to the nearest year. For example, if someone has been at Airbnb for 3 years and 7 months, they will get an additional 4 weeks of salary, or 18 weeks of total pay. Outside the US, all employees will receive at least 14 weeks of pay, plus tenure increases consistent with their country-specific practices. 

Equity

We are dropping the one-year cliff on equity for everyone we’ve hired in the past year so that everyone departing, regardless of how long they have been here, is a shareholder. Additionally, everyone leaving is eligible for the May 25 vesting date. 

Healthcare

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. 

Job support

Our goal is to connect our teammates leaving Airbnb with new job opportunities. Here are five ways we can help:

  • Alumni Talent Directory — We will be launching a public-facing website to help teammates leaving find new jobs. Departing employees can opt-in to have profiles, resumes, and work samples accessible to potential employers. 
  • Alumni Placement Team — For the remainder of 2020, a significant portion of Airbnb Recruiting will become an Alumni Placement Team. Recruiters that are staying with Airbnb will provide support to departing employees to help them find their next job.
  • RiseSmart — We are offering four months of career services through RiseSmart, a company that specializes in career transition and job placement services. 
  • Employee Offered Alumni Support — We are encouraging all remaining employees to opt-in to a program to assist departing teammates find their next role.
  • Laptops — A computer is an important tool to find new work, so we are allowing everyone leaving to keep their Apple laptops. 

Here is what will happen next

I want to provide clarity to all of you as soon as possible. We have employees in 24 countries, and the time it will take to provide clarity will vary based on local laws and practices. Some countries require notifications about employment to be received in a very specific way. While our process may differ by country, we have tried to be thoughtful in planning for every employee. 

In the US and Canada, I can provide immediate clarity. Within the next few hours, those of you leaving Airbnb will receive a calendar invite to a departure meeting with a senior leader in your department. It was important to us that wherever we legally could, people were informed in a personal, 1:1 conversation. The final working day for departing employees based in the US and Canada will be Monday, May 11. We felt Monday would give people time to begin taking next steps and say goodbye — we understand and respect how important this is.

Some employees who are staying will have a new role, and will receive a meeting invite with the subject “New Role” to learn more about it. For those of you in the US and Canada who are staying on the Airbnb team, you will not receive a calendar invite.

At 6pm pacific time, I will host a world@ meeting for our Asia-Pacific teams. At 12am pacific time, I will host a world@ meeting for our Europe and Middle East teams. Following each of these meetings, we’ll proceed with next steps in each country based on local practices.

I’ve asked all Airbnb leaders to wait to bring their teams together until the end of this week out of respect to our teammates being impacted. I want to give everyone the next few days to process this, and I’ll host a CEO Q&A again this Thursday at 4pm pacific time.

Some final words 

As I have learned these past eight weeks, a crisis brings you clarity about what is truly important. Though we have been through a whirlwind, some things are more clear to me than ever before.

First, I am thankful for everyone here at Airbnb. Throughout this harrowing experience, I have been inspired by all of you. Even in the worst of circumstances, I’ve seen the very best of us. The world needs human connection now more than ever, and I know that Airbnb will rise to the occasion. I believe this because I believe in you. 

Second, I have a deep feeling of love for all of you. Our mission is not merely about travel. When we started Airbnb, our original tagline was, “Travel like a human.” The human part was always more important than the travel part. What we are about is belonging, and at the center of belonging is love.  

To those of you staying, 

One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story. I am confident their work will live on, just like this mission will live on.

To those leaving Airbnb, 

I am truly sorry. Please know this is not your fault. The world will never stop seeking the qualities and talents that you brought to Airbnb…that helped make Airbnb. I want to thank you, from the bottom of my heart, for sharing them with us.

Brian