← Layoff Tracker
SF Bay Area
July 13, 2020
June 10, 2024

Yelp Layoffs: What Happened & Why?

In April 2020, Yelp, a popular local business review platform, laid off 1,000 employees and furloughed another 1,100 due to the impact of the COVID-19 pandemic. The decision came as consumer interest in key categories like restaurants and nightlife significantly decreased. In this article, we'll discuss what happened, why it happened, and the potential future impact on Yelp's business.

Why did Yelp have layoffs?

Yelp's decision to lay off and furlough employees was primarily driven by the significant decrease in consumer interest in key categories like restaurants and nightlife due to the COVID-19 pandemic. The company experienced a 64% decline in customer interest in restaurants since March 10, indicating a shift in industry demands. Yelp's CEO, Jeremy Stoppelman, emphasized the unprecedented magnitude and impact of the crisis on the company's business, with the duration and impact of the pandemic on revenues remaining unknown.

To mitigate the financial impact, Yelp took measures to reduce operating costs, including cutting executive pay, reducing server costs, and deprioritizing projects. While the article does not provide specific information about severance packages offered, it does mention that Yelp will offer severance pay and reimbursement for health insurance coverage to employees who are laid off. Furloughed employees will retain most of their benefits and receive two weeks of additional pay.

Financial Impact and Future Directions

Yelp's recent decision to lay off a portion of its workforce is part of a strategic restructuring aimed at refining operational efficiency and enhancing its competitive edge in the digital market. This move is in line with common practices within the tech industry, where companies realign resources to better focus on core business areas and innovative initiatives.

For Yelp, this could mean prioritizing developments that drive user engagement and business listings, essential for its revenue model. By streamlining its workforce, Yelp is positioning itself to be more agile and responsive to market dynamics, which is crucial for sustaining growth and leadership in the local search and review space.

Impact on Industry

The COVID-19 pandemic has significantly impacted the consumer industry, with companies like Yelp experiencing a sharp decline in consumer interest. Yelp's decision to lay off or furlough over 2,000 employees highlights the challenges faced by companies in the industry, as they navigate through the crisis by implementing cost-cutting measures and making difficult decisions. The layoffs also reflect the broader impact of the pandemic on the job market, with millions of Americans filing for unemployment. The uncertainty surrounding the duration of the pandemic suggests that its effects on the consumer industry may be long-lasting.


Yelp's layoffs and furloughs, affecting over 2,000 employees, were driven by a significant decrease in consumer interest in key categories like restaurants and nightlife due to the COVID-19 pandemic. These actions may impact Yelp's future standing in the industry and reflect the broader challenges faced by the consumer sector. The uncertainty surrounding the pandemic's duration suggests long-lasting effects on the market, potentially leading Yelp to explore new strategies and focus areas for future growth.