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Transcript
- Lucas: On May 5, 2020, Brian Chesky sat down at his kitchen table in San Francisco and wrote an email that would be sent to every Airbnb employee. It began with a single, brutal line: 'We are collectively living through the most harrowing crisis of our lifetime.' Luna: That email went on to announce the layoff of 1900 people — nearly 25 percent of the company. And yet, somehow, it became one of the most praised corporate communications in modern history. Lucas: If today's episode has given you a useful framework for thinking about crisis communication or leadership under pressure, the way this podcast stays ad-free is through listener support — just buy me a coffee dot com slash fexingo. It's a small gesture that keeps these conversations going. Luna: And we mean it — the reason we can dive deep into stories like Airbnb's without a sponsor break is because of listeners who chip in a few bucks. So if you found value here, that's where you can help. Lucas: Alright — so let's talk about what Chesky actually did that made that layoff different. Because the outcome was not just a company that survived. Airbnb went from an 80 percent revenue collapse in April 2020 to a public offering in December 2021 that valued the company at over one hundred billion dollars. Luna: Eighty percent drop in eight weeks. That is almost incomprehensible for a business that had been growing like crazy. What was the first thing they did? Lucas: They cut costs everywhere they could without touching people. Chesky slashed his own salary to zero, cut executive pay by 50 percent, paused marketing, pulled the IPO filing. But by early May, it was clear those measures weren't enough. The company projected 2020 revenue would be less than half of 2019. Luna: So he had to make a choice. And the way he framed it in that memo was really deliberate — he said, 'We need to make sure the core of our business is healthy.' Meaning, cut deep enough that you don't have to cut again. Lucas: Exactly. That's principle number one: do it once, do it right. The second principle was radical transparency. He explained exactly why the layoff was necessary, how they decided which roles to cut, and even what severance people would get — all in that single email. Luna: And the specifics of that severance are what really stood out. Fourteen weeks of pay, plus one week for every year at the company. Twelve months of COBRA health insurance. Laptops could be kept. They set up an alumni talent directory and offered job placement support. Lucas: Right — and they also let departing employees keep their equity. For people who had been there less than a year, they accelerated the vesting so those folks actually got something. That's almost unheard of in a layoff scenario. Luna: What was the thinking behind that? I mean, that costs real money. Lucas: Chesky said they wanted to treat people the way they'd want to be treated if the roles were reversed. But I think there was also a pragmatic angle: Airbnb's brand is built on trust. If you trash your own employees, the hosts and guests notice. The way you treat people on the way out sends a signal about who you are. Luna: And the signal worked. Public sentiment was overwhelmingly positive. I remember seeing former employees posting on LinkedIn saying they were heartbroken to leave but grateful for how it was handled. Lucas: That's the third principle: preserve your culture even when you're shrinking it. Because the people who stay are watching. They need to trust that if things turn around — and they will — the company will have their back. Luna: So let's talk about the turnaround. How did they go from that low to a successful IPO? Lucas: Well, the layoff happened in May. By June, domestic travel started to bounce back — people were renting entire homes within driving distance instead of flying to cities. Airbnb's product was perfectly suited for that shift. They saw bookings recover faster than any analyst expected. Luna: And they had cut so deeply that they were actually profitable by the third quarter of 2020. That's insane — to go from an 80 percent drop to profitable in six months. Lucas: It was a combination of cost discipline and product-market fit in a changed world. They also doubled down on the 'live anywhere' trend — long-term stays of 28 days or more became a huge growth driver. Luna: So the layoff wasn't just a nice story about compassion — it was the reason they could survive and then thrive. If they had done a series of smaller, wishy-washy cuts, morale would have been destroyed and they'd still be bleeding cash. Lucas: Exactly. There's a lesson there for any founder facing a crisis. The instinct is often to delay the hard decision, to hope it gets better. But Chesky's approach was to face the worst-case scenario head-on, make the painful choice, and then communicate it with total honesty. Luna: And he was transparent about the emotional toll, too. In that memo, he wrote, 'I am truly sorry. Please know this is not your fault.' He owned it as his decision, not something forced on him by faceless forces. Lucas: That level of accountability is rare. Most CEOs hide behind 'market conditions' or 'restructuring.' Chesky said, 'I made this choice.' And then he backed it up with the most generous severance package Silicon Valley had ever seen at that scale. Luna: Did the layoff affect Airbnb's hiring ability afterward? I'd imagine if you're a top engineer, seeing that kind of treatment makes you more likely to join, not less. Lucas: Absolutely. In fact, Airbnb was named one of the best places to work in 2021 and 2022. The alumni network they built also became a talent pipeline — many former employees went on to found or join other startups, and they speak highly of Airbnb. Luna: So the brand equity translated into recruiting equity. That's a long-term payoff you don't see on a spreadsheet. Lucas: Right. And it's a reminder that how you handle the worst moment of your company's history can define its reputation for a decade. Airbnb didn't just survive 2020 — it emerged with a stronger cultural foundation than it had before. Luna: One thing that always stuck with me: Chesky said he wanted to 'write the letter he would want to read if he were being laid off.' That's a simple test, but most leaders don't actually apply it. Lucas: Yeah — and the proof is in the pudding. Airbnb's stock debuted at $146 per share in December 2021. As of today, June 28, 2026, it's traded in a range that reflects the durability of that recovery. Luna: So what's the main takeaway for a founder listening right now? If you ever have to do layoffs — and hopefully you won't — but if you do, what should you steal from this playbook? Lucas: Three things. One: cut deep enough that you won't need a second round. Two: be radically transparent about the why and the how. Three: treat departing employees like valued alumni, not liabilities. Your brand, your remaining team, and your future hires are all watching. Luna: And one more thing — put yourself in their shoes. Write the letter you'd want to read. Lucas: That might be the most important line of all. Because in a crisis, people remember how you made them feel, not just the numbers on the spreadsheet.