Airbnb is adopting a "live-anywhere" ethos for its workforce to guide its return-to-office plans, putting office space on the chopping block as it looks to reduce what it deems as unnecessary real estate expenses that, combined with loan and stock-award costs, led to a $1.2 billion first-quarter loss.

The San Francisco-based vacation rental company has been positioning itself to capture business from potential customers who are working remotely and has now told its own workforce that it would try to model a similar approach as it prepares for work arrangements beyond the pandemic. The company is looking to trim costs that grew faster than its revenue as travel demand increased.

"I told employees a couple of weeks ago that there would be two guiding principles: We want to model a live-anywhere lifestyle, and we want more flexibility for our employees," Airbnb CEO Brian Chesky told analysts on an earnings call Thursday, addressing questions about the return-to-work plans for employees who have been operating out of the office during the health crisis.

Airbnb said it is riding a hospitality recovery wave as vaccinated travelers and pent-up demand fuel new bookings and steady spikes in revenue after a year of record lows in travel during the pandemic. But even as the company pieces together business it lost to the pandemic, its year-over-year loss grew to more than $1.2 billion.

The company attributed $113 million of its losses for the first quarter of the year to office space it leases in the city but said is "no longer necessary given our restructuring and cost-cutting efforts." But it said the bulk of its losses for the quarter were attributable to capital it raised in response to the pandemic early last year as well as carryover costs related to its initial public offering in December.

The firm said the real estate costs were less than half the $229 million expense for stock-based compensation during the quarter, on top of $292 million costs for a mark-to-market adjustment for warrants associated with a term loan and a $377 million loss related to the repayment of term loans.

The office space in question is Airbnb's more than 85,850 square feet at Showplace Square, a property it has leased for more than three years but is now listed for sublet, according to CoStar. The office space at 650 Seventh St. in San Francisco's SoMa neighborhood is being marketed by CBRE Group, which is advertising the space with a lease term through February 2023.

Airbnb's employees, most of whom are based in the Bay Area, including at its headquarters at 888 Brannan St., won't be expected to return to the office until as late as September 2022. And even with that eventual return, Chesky said Airbnb would implement a hybrid work model that would give its workers the choice to come in on some days and work elsewhere on others.

"Once they do come back, they won't be expected to come back to the office five days a week," the CEO said.

But similarly to other tech giants such as Google, Facebook, Apple, Salesforce and Uber that are scattered throughout the region, Airbnb emphasized the importance of bringing its workforce together under one roof.

"As a creative company, in-person collaboration is important," Chesky said. "We want to find the balance between that live-anywhere lifestyle and in-person collaboration. It's what we'll be working on over the next year."

Airbnb expects what the CEO said will be "the travel rebound of the century." Nonetheless, the company is making plans for its own pandemic-induced changes.

The company's decision to cut down on its fixed expenses is part of its response to steep revenue declines it weathered in the months after the pandemic's outbreak last year. At its worst point, Airbnb reported $335 million in revenue in the second quarter of 2020, a 72% drop compared to the same period a year earlier. Almost overnight, Airbnb's business dropped by 80% at the onset of the health crisis.

Last year was a year "when travel was altered fundamentally, and Airbnb changed as well," Chesky said. "Through it all, we emerged as a stronger and more efficient company. Our results also reflect our continued focus, financial discipline, and strong execution. We will never forget the lessons we learned last year, and we are prepared for what’s ahead."

In the first three months of the year, Airbnb reported a 5% revenue increase to $887 million that brought the company back to its pre-pandemic levels. It generated nearly 64.5 million night and experience bookings, a 13% year-over-year increase. Its gross booking value soared by 52% compared to the same time in 2020 to more than $10.3 billion.

The company is planning to spend more on capital expenditures this year, mainly on office improvements in North America, but the amount is expected to be "significantly lower than 2019," it said in a shareholder letter, adding that most of the investments it intends to make this year stem from projects that were delayed in 2020.

"We believe that the changes we’ve seen in travel are long-lasting," Chesky said. "The world is never going back to the way it was, and that means that travel is never quite going back to the way it was. But travel is starting to return. While conditions aren’t yet normal, they are improving, and we expect a travel rebound unlike anything we have seen before."

Airbnb's steady growth keeps it ahead of its competitors as other players in the hospitality industry scramble to position themselves ahead of the anticipated travel surge. Booking Holdings Inc. recently reported a quarterly revenue decline of 50%, while Expedia Group Inc.'s revenue dropped 44% compared to the same time last year.