Yelp Plans to Cut 1,000 Jobs and Furlough Another 1,100 Employees

Small businesses have seen a major hit due to the coronavirus pandemic and this has caused a problem for Yelp, who makes its money from businesses that advertise on its platform.

Yelp announced this week that it has plans to cut 1,000 jobs, furlough another 1,100 employees and reduce hours for other workers.

The job cuts and furloughs combined represent about a third of the company’s workforce, which stood near 6,000 at the end of the year.

Restaurants, Yelp’s most popular category, saw a 64% drop since March 10, and the nightlife category is down 81%, according to an email Yelp sent to employees.

Gyms and similar businesses are down 73%, while salons and beauty-related businesses are down 83%.

“All told, the millions of local businesses hit hardest by the effects of COVID-19 face the prospect of closing and laying off their employees, without knowing when, or if, they’ll be able to reopen,” said Jeremy Stoppelman, Yelp’s co-founder and CEO in the e-mail.

“As local businesses urgently figure out how to manage this crisis, we must do the same. To help Yelp get through this period of great uncertainty, we have had to make some incredibly hard decisions to reduce our operating costs.”

“What led to this decision to part with employees, even temporarily, was not the present or near past, but where the data indicates we are headed. With revenue levels expected to be substantially lower, Yelp must make these severe cost reductions to sustain itself as a business, which I fully understand will negatively impact so many of my colleagues and friends,” Stoppelman said. “I do not take lightly the additional difficulties each one of those affected and their families will face in the coming months, and I’m truly sorry.”

“We had an ambitious 2020 plan that we were executing successfully, and never could we have imagined such a rapid shutdown of the many local economies that drive our business,” he added.

Disclaimer: We have no position in Yelp Inc. (NYSE: YELP) and have not been compensated for this article.