Yelp has laid off 1,000 of its workers and furloughed an additional 1,100 as it grapples with reduced spending from restaurants amid the COVID-19 pandemic.
Yelp’s co-founder and CEO Jeremy Stoppelman sent an email to the company’s employees outlining the repercussions that COVID-19 has had on its business. Beyond just people losing their jobs, the remaining employees are being asked to work fewer hours.
High-level executives are also taking a 20 to 30 percent pay cut to help keep the company afloat through these difficult times.
It may seem odd that an internet-based business like Yelp would need to cut its workforce, but it relies on the restaurant industry to make its money. Since the restaurant industry has been hit so hard, it’s been unable to pay Yelp for advertising. This is how the company generally earns its income, so it’s not fairing well during the COVID-19 pandemic.
The company also told The Verge it took drastic measures to try and avoid these layoffs, but that it was eventually left with no other choice.
What’s most intriguing about this story is that it shows how smaller internet staples like Yelp can easily experience financial difficulties, causing concern for other internet businesses that rely on real-world face-to-face interactions for income.
Source: The Verge