Yelp: Pandemic Layoffs, Business Model, and Current Status

Category: local reviews and advertising
Pandemic-layoff role: Additional sourced company
Last updated: 2026-09-25
Related article: The Pandemic Layoff Stress Test

Founders, executives and investors

Stoppelman co-founded Yelp and has been its chief executive since its start in 2004, according to that proxy statement. Before Yelp he held engineering roles at PayPal from 2000 to 2003, ending as vice president of engineering. Yelp trades on the New York Stock Exchange.

Business before the pandemic

Yelp sells advertising to the local businesses that consumers find through its reviews. In 2019 it had begun a multi-year plan to grow through product, marketing and multi-location customers "rather than primarily through local sales headcount." Its users wrote nearly 19 million reviews in 2020 alone.

What the pandemic changed

Consumer engagement and non-term advertising budgets fell sharply in March and April 2020, the company wrote. The April restructuring plan combined spending cuts with "workforce reductions and furloughs, as well as salary reductions and reduced-hour work weeks." Layoffs.fyi logged the layoff on April 9 at 1,000 employees. Executive officers took 30 percent salary cuts from April 19 to August 8, and other senior managers 20 percent. Departing employees got severance and three months of company-paid health insurance; furloughed employees kept most benefits and received two extra weeks of pay. Yelp "substantially" reduced its local sales force. Stoppelman, whose salary rate was already $1, also gave up the stock awards due to vest during the rest of 2020.

Yelp's closure counts became one of the private data sets used to measure the damage. The Philadelphia Inquirer reported in August 2020 that, by Yelp's count, at least 252 Philadelphia-area businesses had closed permanently between March 1 and July 10. Nationally, Yelp counted more than 27,600 retail stores and nearly 24,000 restaurants closed, temporarily or permanently, between March 1 and June 15. Federal Reserve economists were skeptical. Yelp's highest estimated permanent closure rate, about 3.5 percent from March through August for burger and sandwich restaurants, annualized to about 7 percent, below the roughly 8 percent that restaurants exit in a normal year. "It seems unlikely that actual exit rates are below historical averages as Yelp data suggest," they wrote.

During the pandemic

On March 20, 2020, Yelp announced "$25 million in relief," mainly for independent restaurant and nightlife businesses. Its annual report for 2020 counts $22.6 million of relief, booked as price concessions, plus paused campaigns and free advertising in April and May worth $14.5 million. Together that is $37.1 million.

Most of Yelp's advertisers are small and medium-sized businesses. By the end of March, page views and searches for restaurants, its most-trafficked category, had fallen about 60 percent from the start of the month, Yelp told the SEC on April 9. For its services category, which brings in most of its revenue, the drop was about 40 percent. The company expected "many of its customers to cancel or reduce spending." The relief took the form of price cuts: waived advertising fees, three months of free Reservations and Waitlist for restaurants, and "$100 in free search advertising" for restaurants offering delivery or takeout. Yelp's first-quarter 10-Q and second-quarter shareholder letter record it as reduced revenue: $4.6 million in the first quarter and about $9 million in the second. The full-year $22.6 million equals 2.6 percent of Yelp's 2020 net revenue of $872.9 million.

On March 24 the Yelp Foundation and GoFundMe pledged to match up to $1 million in donations, with a $500 matching grant for eligible businesses that raised at least $500. An update dated April 13 on the same blog post says the rollout had been paused and that Yelp then worked with GoFundMe on a way for businesses to "opt into" the feature.

Yelp expected the April restructuring plan to cost $8 million to $10 million, about half of it for furloughed staff. At March 31 it had about $491 million in cash, cash equivalents and marketable securities and no debt, and it deferred share buybacks indefinitely. California's WARN list records a Yelp notice dated April 9, 2020, covering 235 San Francisco employees and classed as a temporary layoff.

Sales headcount went from 3,450 at the end of March to 1,850 at the end of June, according to the second-quarter shareholder letter. The 2020 annual report describes the Local sales team shrinking by "more than 50% in April 2020," a process "made possible by our investments in product development and significantly accelerated by the COVID-19 pandemic."

On July 13 Stoppelman told staff by email that 63 more jobs, "primarily in Workplace and Recruiting," were ending because of extended office closures. Yelp ended 2020 with about 3,900 employees, down from 5,950 a year earlier.

Yelp does not appear as a borrower in the SBA's Paycheck Protection Program loan data (release of September 30, 2024). Under the CARES Act it deferred $15.0 million of employer Social Security taxes, according to its 2020 annual report.

Non-employee directors gave up their board pay for the second quarter of 2020. The executives' 2020 performance awards, which required year-over-year growth, paid nothing: revenue fell 14 percent and adjusted EBITDA 34 percent. In the third quarter the compensation committee granted new awards measured on the second half of 2020 alone, at half the original target value. It set the revenue target at about the midpoint of analysts' consensus, $422 million, using that consensus "as a stand-in for investor expectations." Second-half revenue came in at $454.0 million, and the new awards became eligible to vest at about 173 percent of target. For Stoppelman that meant 119,372 shares against a target of 69,033. The committee's stated view was that "there should be no payout for the first half of the year." His reported 2020 compensation was $7,960,242, against $6,310,987 in 2019; the proxy says those stock-award figures are grant-date values that "do not reflect the actual economic value realized."

Yelp bought back no shares in the first quarter of 2020, suspended repurchases in April and resumed them in November, spending $24.4 million that year. It had spent $481.0 million on buybacks in 2019 and spent $262.9 million in 2021. Revenue in 2021 was $1,031.8 million, above 2019's $1,014.2 million, and year-end headcount was about 4,400.

After the first shock

Revenue grew 32 percent and traffic 40 percent in the third quarter of 2020 from the second. Yelp restored salaries in August 2020 and recalled nearly all furloughed employees between August and October. Revenue from home and local services returned to growth in the second half, and self-serve advertising revenue grew about 25 percent in the fourth quarter. Stoppelman called 2020 "the most challenging year in our 16-year history."

Since 2025

Yelp is still listed on the New York Stock Exchange. Its investor site reported $361 million of net revenue for the first quarter of 2026, 485,000 paying advertising locations and 330 million cumulative reviews. Its newsroom announced "record net revenue in 2025" on February 12, 2026, and the purchase of Hatch, an AI lead-management platform, in January 2026.

Yelp Profile: Pandemic Layoffs, Business Model, and Current Status