Sonder Shuts Down Completely, Eliminating All 1,421 Jobs After Marriott Partnership Ends

Sonder, the hospitality technology company that attempted to revolutionize short-term rentals, laid off its entire workforce of 1,421 employees on November 10, 2025, effectively shutting down operations. The company's closure follows the termination of its partnership with Marriott International, marking the end of what was once considered a promising experiment in blending hotel services with apartment-style accommodations. The Sonder layoffs represent one of the most complete workforce reductions in the hospitality tech sector this year.

Context of the Decision

The decision to eliminate the entire workforce stems from Sonder's inability to maintain its critical partnership with Marriott, which had become essential to the company's business model. The hospitality startup had struggled with profitability throughout its existence, burning through investor capital while attempting to scale its technology-driven approach to short-term rentals. Market conditions in the post-pandemic travel industry created additional pressure, as consumer preferences shifted and competition intensified from established players like Airbnb and traditional hotel chains.

Sonder's business model, which involved leasing apartments and converting them into hotel-like accommodations with technology-enabled services, proved unsustainable without the backing of major hospitality partners. The company had been operating at significant losses while trying to maintain properties across multiple markets, making the workforce reduction inevitable once key revenue streams disappeared.

Impact on Operations

The complete workforce reduction affects all departments across Sonder's operations, including technology development, property management, customer service, and corporate functions. Employees in major markets where Sonder operated properties, including New York, San Francisco, Los Angeles, and international locations, face immediate job displacement. The company's technology platform, which managed booking systems and guest services, will cease operations entirely.

Property management staff responsible for maintaining and servicing Sonder's portfolio of converted apartments represent a significant portion of the affected workforce. Customer service representatives who handled guest inquiries and support through the company's app-based system are also among those losing their positions. Corporate employees in finance, marketing, and business development roles at the company's headquarters face the same fate.

Company Financial Background

Sonder went public through a SPAC merger in 2021, raising approximately $335 million and achieving a valuation of over $2 billion at its peak. However, the company consistently struggled to achieve profitability, reporting significant losses in each quarter since going public. The stock price declined dramatically from its initial highs, reflecting investor concerns about the company's cash burn rate and path to profitability.

The company had raised over $560 million in total funding throughout its existence, attracting investments from prominent venture capital firms and strategic partners. Despite this substantial capital infusion, Sonder's unit economics remained challenging, with high property acquisition and maintenance costs outweighing revenue from bookings. Recent quarterly reports showed declining occupancy rates and average daily rates, indicating fundamental challenges with the business model.

Industry Outlook

The Sonder layoffs highlight broader challenges facing the short-term rental and hospitality technology sectors. Companies attempting to compete with established players like Airbnb have struggled to differentiate their offerings while maintaining profitability. The hospitality industry has seen increased consolidation, with smaller players unable to compete against platforms with extensive network effects and established user bases.

Traditional hotel chains have increasingly focused on developing their own extended-stay and apartment-style offerings, reducing the market opportunity for intermediary companies like Sonder. The rise of hybrid work arrangements has also changed travel patterns, affecting demand for the type of accommodations Sonder specialized in providing.

Conclusion

The complete shutdown of Sonder represents a significant failure in the hospitality technology sector and serves as a cautionary tale about the challenges of disrupting established industries. The company's inability to achieve sustainable unit economics, combined with its dependence on strategic partnerships, ultimately led to its demise. For the 1,421 affected employees, the closure creates immediate uncertainty in a competitive job market. The hospitality technology sector will likely see continued consolidation as investors become more selective about funding companies without clear paths to profitability.