Purpose should guide every decision

Delivering redundancy news does not have to be cruel, as Brian Chesky, CEO of Airbnb, demonstrated this week

Making employees redundant is never easy, but Brian Chesky, CEO and co-founder of Airbnb, has just delivered a masterclass. The company is laying off close to a quarter of its 7,500 strong workforce after the global lockdown played havoc with its business model.

Such decisions may seem anathema for a company whose mission and purpose are rooted in the sense of belonging, and in a letter to colleagues Chesky makes clear they have not been easy. But while a strong corporate purpose cannot insulate a company from harsh economic realities, he demonstrates that it can guide the way in which it responds.

The company, as Chesky puts it, faces two unknowns: uncertainty as to when travel will resume and, secondly, what form it may take in the future. Consequently, Airbnb will need to refocus on its core offering – ‘everyday people who host their homes’ – and pause or scale back other operations. Such decisions are ‘not a reflection of the work from people on these teams’, he points out.

Instead, Chesky stresses the importance of a clear set of five principles, guided by the company’s core values, that shaped the way he approached redundancies and, to which, ‘I have done my best to stay true’.

For other organisations faced with the same dilemma, those principles might not be a bad place to start. In short, they are:

  •     Map all reductions to future business strategy and required capabilities
  •     Do as much as possible for those who are affected
  •     Be unwavering in a commitment to diversity
  •     Talk to those who have been impacted on a one-to-one basis
  •     Wait to communicate until all decisions have been made: drip feeding partial information only makes matters worse

Chesky signs off his letter with two messages: for those staying and those departing. To the latter, he writes: ‘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.’

Actions may speak louder than words, but when they are married together – so that the words match the actions – authenticity shines through. Other leaders might like to take note.