Coronavirus is bruising San Francisco’s tech industry.
Yelp is laying off 1,000 workers and furloughing another 1,100, roughly a third of its staff, the company said Thursday. Eventbrite laid off 450 employees, or nearly half of its workforce, on Wednesday.
Airbnb, which planned to go public this year, raised $1 billion this week as bookings have plunged worldwide. The company enacted a hiring freeze for most jobs and paused marketing in an effort to save $800 million this year, tech news website the Information reported last month.
The three companies, which are all headquartered in South of Market, are reliant on industries that have been devastated by the virus: live events, retail, restaurants and travel. In contrast, major companies like Salesforce and Google are still hiring rapidly and donating millions of dollars for aid.
Smaller companies are more vulnerable to an economic downturn and other challenges from coronavirus compared to the tech giants, Colin Yasukochi, executive director of brokerage CBRE’s Tech Insights Center, previously told The Chronicle. More economic pain could widen the gap between the biggest tech companies and startups that are struggling.
Shelter in place orders have shuttered most small businesses in the Bay Area and many others around the world, which has badly hurt Yelp.
“Yelp connects people with these great local businesses, and as their worlds have been turned upside down, these businesses are understandably forced to pause or reduce spending on the products and services that Yelp provides,” Yelp CEO Jeremy Stoppelman wrote in an internal company email Thursday. “To help Yelp get through this period of great uncertainty, we have had to make some incredibly hard decisions to reduce our operating costs.”
The company expects to spend $8 million to $10 million on severance and furloughing costs. Executives are taking a 30% pay cut, and Stoppelman will not receive a salary this year.
The company hasn’t announced if it plans to downsize or close any offices, and a spokeswoman didn’t comment beyond the internal email. According to real estate brokerage Cushman & Wakefield, Yelp recently listed 68,126 square feet, room for around 235 employees, for sublease at 55 Hawthorne St. The listing came before the coronavirus spread extensively in the U.S.
Office sublease space increased in the first quarter in San Francisco, a sign that the market is cooling as more companies try to unload excess space.