WeWork, the ambitious office-sharing startup valued at more than $47 billion earlier this year, is planning to lay off “thousands” of employees as its financial woes mount.
According to the New York Times, at least 4,000 employees could lose their jobs, with cuts expected to come from both WeWork’s core subletting business and its ancillary businesses like Meetup and Wavegarden, an artificial wave machine that WeWork founder Adam Neumann invested in.
After a failed public offering forced Neumann to step down from his role as CEO in September—taking with him more than $1.7 billion in severance—the office-sharing startup was bailed out by its largest shareholder, SoftBank, though it continues to struggle. WeWork reported a net loss of $1.25 billion in the third quarter of 2019.
In July, WeWork had a record-high 1,590 online job listings, according to Thinknum Alternative Data, a data analysis company. Today, that figure stands at 408, with the company slashing more than 74% of postings. In sales, WeWork cut job listings by 77% from early this summer, as well as 88% of marketing positions.
“The reality is setting in that WeWork is no longer a growth story so much as it is a salvation story,” said Jon Marino, Thinknum’s finance editor. “They’re cutting across the board. … It’s a sign that they’ve overstaffed over time.”
The rapid expansion has left WeWork with offices in more than 33 countries, including some of the most expensive cities in the world. More than 1,000 cleaning and facilities employees’ jobs will be outsourced to the real estate services company JLL, with comparable benefits and the same level of pay. However, employees who don’t transfer will lose their jobs without severance.
Writing on Twitter, the employee-run WeWorkers Coalition says the company has given them no information about employees’ vested stock options, and some employees have not even received an offer letter. The coalition is asking WeWork to provide three months’ severance to any employee who doesn’t sign with JLL.
In an investor’s presentation delivered in October, WeWork laid out a “90-day game plan” that included divesting from WeWork’s “non-core” businesses like Meetup and Wavegarden, and a “reduction in headcount across ventures.” According to the presentation, WeWork also acknowledged it had to “reenergize employees.”