Another bloodbath: Lyric to slash jobs, drop units

Hospitality startup had already laid off 20% of staff in February

Mar.March 25, 2020 07:00 AM
Lyric’s Andrew Kitchell and Joe Fraiman

Lyric’s Andrew Kitchell and Joe Fraiman

Lyric, the Airbnb-backed hospitality startup, is drastically downsizing — just a month after laying off 20 percent of its staff.

With the coronavirus pandemic bringing travel to a standstill, the San Francisco-based company gave pink slips to the majority of its 100 employees on Friday, sources said.

A spokesperson for the company confirmed that 80 percent of Lyric’s staff was told that if the macro economic environment doesn’t change in two months, the company cannot guarantee their jobs.

Most of the 400 units the company leases might also be abandoned in the downsizing. Lyric generally leases full floors in apartment buildings and rents out furnished units to travelers.

A company spokesperson said it will keep 132 units online at 70 Pine Street in New York City. All of its other locations around the country are “in flux.” Wheelhouse, a sister company that provides software for vacation rental hosts, will remain operational.

In a statement, CEO Andrew Kitchell said that as a result of the “global public health crisis” of Covid-19, Lyric “made the difficult decision to reduce our operations.”

“We know this is a very unsettling time for everyone, and our hearts go out to all of those affected by these unprecedented circumstances,” he said.

Founded in 2014, Lyric was operating nearly 600 units in 14 cities around the country only three months ago. Last year it raised $160 million from Airbnb, RXR Realty and Tishman Speyer.

Since then, however, cracks have emerged in the business.

At a companywide meeting in January, company leaders disclosed Lyric had missed its 2019 revenue target. In February it announced plans to close nearly 200 units across several cities. It also laid off about a fifth of its staff — roughly 25 of 120 staffers — in a restructuring.

With only essential businesses open in many states, hotels and hospitality startups have struggled with canceled reservations and a drop in bookings.

Marriott confirmed Saturday that it plans to furlough thousands of corporate employees, including two-thirds of its 4,000 employees at its headquarters in Bethesda, Md. The furloughs will begin in April and last for 60 to 90 days, during which time employees will receive 20 percent of their salaries.

This week Sonder laid off or furloughed one-third of its staff, or roughly 400 employees, The Information reported. The company, which has raised $345 million from investors, reported a 20 percent drop in bookings and said it would look to cut expenses companywide.

“If we pull these levers simultaneously, we have a chance,” CEO Francis Davidson said.

The Guild and WanderJaunt have also cut jobs, and the pandemic figures to cost Airbnb millions of dollars. As of March 14, bookings were down 95 percent year-over-year in Asia, 75 percent in Europe and 50 percent in the U.S.

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