For years, WeWork executives pitched their trendy office spaces around the notion of building … [+]
Michael Short/Bloomberg
WeWork laid off more workers Thursday, according to three former employees and a person close to the business, the latest in a series of hits for the once promising shared-office business. Sources say the cuts included community managers, real estate professionals in Canada and Europe, as well as a team in charge of partnerships. One of the sources said the number of people impacted could be in the hundreds.
“As WeWork continues to execute its strategic five-year plan we are realigning certain functions and teams to reflect our business priorities,” said a company spokesperson, who confirmed the layoffs but would not comment on the number of employees let go or the departments impacted. He added that the cuts are part of an “ongoing process,” indicating more people would be losing jobs.
WeWork had 12,500 employees last June, according to plans for a public offering that faltered in September and later grew to 14,500. The company let go 2,400 people in November and another 250 in March. Earlier this month, CEO Sandeep Mathrani and executive chairman Marcelo Claure told employees more cuts would be necessary by the end of May and that they would be evaluating every function in every region.
WeWork has been cutting costs after the failed IPO, which it was counting on to fund lease obligations and other expenses. The company lost $2.6 billion in the first three quarters of 2019 against revenue of $2.4 billion. It has since been shedding assets, including the sale of workplace technology startup Managed by Q to a competitor for around $25 million in March, 11 months after it paid $220 million for the business. It also sold the Lord & Taylor building in New York, once envisioned as it’s headquarter, to Amazon.
A bailout in October from mega-backer SoftBank offered some relief to the company. But hundreds of current and former employees feel betrayed after the investor canceled a deal to buy out their shares for $3 billion this month. “We were sold on this idea that it was going to be a rocket ship,” one former employee said.
Adam Neumann, 41, and Miguel McKelvey, 46, founded WeWork in 2010, pitching their trendy office spaces around the notion of building community. Neumann, who grew up on a Kibbutz in Israel, even mused about colonizing Mars with tech billionaire Elon Musk.
“When he gets everybody to Mars, we’re going to build a community like there’s never been,” Neumann said in a 2014 Forbes profile. “It’ll be awesome, and if he can just get us there, then we can do it. No question.” Neumann was resigned as CEO amid the IPO fallout.
WeWork has come under fire recently for not protecting its community of tenants and employees, the latter of whom it began offering $100-per-day bonuses if they continued to work amid pandemic lock-down orders.
With reporting by David Jeans.