Aggregators of Physical Elements Struggle

Aggregators of Physical Elements Struggle

Airbnb is cutting 1,900 employees. Uber is also re-calibrating with 3,700 leaving. Across sectors and regions, aggregation business models which connect physical elements through digital platforms have been hit hard by the Covid-19 pandemic. Uber orchestrates a framework where drivers and riders come into equilibrium; Airbnb brings short-term travelers and landlords together. Those entities were dislocated by the pandemic. But platforms like Facebook, Instagram and Google search which depend on digital raw materials like photos, texts, websites, videos, and music have done just well on growth, even if not necessarily financially since adverts have dried up.

Airbnb will lay off 1,900 employees, or about 25% of its workforce, as the pandemic continues to slam the travel industry. The home-sharing company is streamlining its operations in anticipation of its annual revenue being cut in half, according to a memo from CEO Brian Chesky. In total, it’s one of the largest layoffs to hit Silicon Valley since the pandemic struck — and marks an “ominous sign for the tech economy,” says Vox. It’s also a dramatic shift in fortune for the unicorn, which was poised to be a leading candidate for IPO this year.

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Uber is laying off 3,700 employees, or about 14% of its staff, as the ride-hail giant reels from the pandemic and an ongoing battle over worker protections. According to CNBC, CEO Dara Khosrowshahi will give up his base pay for the year. The cuts are happening as California sues Uber and rival Lyft, saying drivers should be considered employees and owed a minimum wage, overtime, paid sick leave, and unemployment insurance. The lawsuit also seeks restitution for unpaid wages. Tech news site The Information says Uber’s bookings have plunged 80% from a year ago.

As the world reopens, some of these redesigns will be permanent. I expect new business models to emerge. Think about it: not many companies will hire people and expect them to show up daily at work. Also, surveillance and security protocols to curb virus transmission will become a new normal.

This is the message: Think deeper into what you do, and how a new ordinance in business systems will affect your sector and business specifically.

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One thought on “Aggregators of Physical Elements Struggle

  1. And by the time the dust settles, most labour unions could be sent to oblivion.

    Government agencies have been busy ‘harassing’ gig economy champions for a while now, they have been doing everything to overload them with the very things that made traditional companies never to be optimal. Now with layoffs mounting and more people asking for palliatives from the governments, they will soon realise the usefulness of entrepreneurs.

    It’s impossible to stop job losses, especially when businesses are more or less writing off quarterly revenues, and some still believe there’s a way to stop a dying person from dying.

    We will soon begin to appreciate many things we despise or feel they should be destroyed. Jobs people look down on will soon become premium, the dislocations are comprehensive.

    Even climate change activism has taken back seat for now, more shocks are on the way.

    Only those who feed well keep pets…

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