The tech industry’s era of “exuberance and euphoria” is coming to an end, according to Airbnb’s chief executive Brian Chesky.
He’s got a lot of layoff data to back him up.
A wave of job cuts have hit the tech sector over the past few weeks. Earlier this month, Facebook’s parent company Meta announced it was cutting 11,000 jobs. Amazon announced this week that it is planning mass layoffs, although it didn’t quite confirm a report that said it will cut 10,000 employees, and implement a hiring freeze into next year. And just a week after becoming Twitter’s new owner, Elon Musk laid off around half of the company’s workforce, in some cases locking them out of their company accounts before receiving an official notice.
“It’s like we’re all in a nightclub and the lights just came on,” Chesky told CNN on Thursday—putting a new twist on a famous saying from legendary investor Warren Buffett about swimming and recessions: “Only when the tide goes out do you learn who has been swimming naked.”
In short, the music has stopped for the tech sector, which has seen market caps plunge after decades of low interest rates and low inflation ended this year: a conclusion to the so-called free money era.
Last month during an earnings call, JPMorgan CEO Jamie Dimon used a sports metaphor: “My experience in life has been you have things like what we’re going through today, there are going to be other surprises. Someone is going to be offsides,”—in another twist to Buffet’s famous line.
Chesky has been making the media rounds to celebrate his own company’s resilience and bold plans for the future, telling Fortune about Airbnb’s new offerings amid a faltering economy. But for a man whose company survived a near-death experience when most travel stopped in 2020, he had some thoughts about changes the tech sector can implement in terms of who they choose to recruit and hire.
“Two-and-a-half years ago, we lost 80% of our business in eight weeks,” Chesky said. “People were predicting we were going to go out of business.” As for his tech colleagues …
“I think Silicon Valley has done so many amazing things for the world, but we have to be careful having a fetishization of new technology, as if the new technology is going to solve all the problems that the last technology created,” Chesky said. “We need more diversity in Silicon Valley, but that diversity should not just be demographic diversity. We need artists, humanists in this industry.”
Unlike other tech companies, layoffs aren’t coming for Airbnb. The company laid off 25% of its staff two months into the pandemic, as the entire travel industry unraveled amid government ordered shutdowns and travel bans.
“We just hunkered down,” he added. “We rebuilt the company from the ground up, and we stayed really lean.” And now, Chesky said, “we’re stepping on the gas, we’re not putting on the brakes.”
Chesky told Fortune that a recession might actually prove to be an opportunity for Airbnb and people looking to make some extra cash.
“We want to get more everyday people to share the homes they live in, whether they’re there or not there,” Chesky said in an interview with Fortune’s Trey Williams this week. “The economy will probably continue to slow down. If that is the case, people more than ever are going to want to make extra money. One of the best and easiest and most straightforward ways to make extra money is [to] take the biggest expense of your life—for most people, it’s their housing—and defray the cost by sharing it when you’re not using it.”
Either way, Chesky said, this is the “ultimate reality check,” for the tech industry, and executives will need to take a “hard look” around them.
The tech wake-up call we’re seeing now, with giants that seemed to be pandemic-proof now reporting lower earnings and cutting back on costs, could also be an indicator of a looming recession. If not a recession warning in itself, the layoffs prove that these companies are worried—and the lights at the nightclub might not turn off for a while.
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This story originally Appeared on Fortune