Social networking operator Yelp Inc will be cutting 1,000 jobs as well as furloughing nearly 1,100 employees in efforts to overcome the impact of COVID-19 pandemic, as announced the company on Thursday.
Chief Executive Jeremy Stoppelman in an employee email wrote that to help the company rise above this situation of great uncertainty, there is a need of taking some bolder and harder steps to reduce the operating costs of the company. Stoppelman said that in nearly all of 16 years at the company, he never been to go through crisis of such high impact and magnitude that adversely affected the business.
The employees being laid off would be paid with severance pay along with reimbursement of health insurance of up to three months. On the other hand furloughed employees would remain entitled of getting most of their benefits with an additional pay of two weeks, Yelp said in the email.
Directives of social distancing across the nation resulted in company facing drastic fall in interest of its consumers, Yelp said. Since March 10, customers’ interest in the Yelp’s major category of restaurants fell by 64% while that fell 81% in nightlife category, Stoppelman said adding that the duration and impact of the pandemic is not known but it will directly be hurting the company’s revenue.
Yelp has already taken several steps including reducing server costs and deprioritization of projects and also cut the pay of executive by 20% to 30%. In those efforts, Stoppelman also surrendered his one year salary.
Staying at home is the mandatory requirement for some people in fight against coronavirus to keep the spread of disease slow. But those efforts resulted in increasing number of companies laying off or furloughing their employees, leaving more number of people unemployed. Last week around 6.6 million American filed unemployment claims for the first time as reported the Labor Department on Thursday, which brought the total number of claims to over 16 million in past three weeks.