The embattled co-working company WeWork eliminated more jobs on Thursday as part of an ongoing series of cuts since the company’s failed attempt at an initial public offering last fall, according to people familiar with the matter.
Sandeep Mathrani, the WeWork chief executive officer, warned staff two weeks ago that more jobs would be lost on top of the 2,400 eliminated last year and 250 more in March. “I want to do it once and know we have a company we can all move forward with,” he said at the time.
It’s not quite working out that way. After this week’s cuts, WeWork will terminate more jobs over the next month, said a person familiar with the plan.
The company also plans to permanently shutter its on-demand effort, known as WeWork Now, said some of the people, who asked not to be identified because the information is private. There’s currently just one location in Manhattan’s Flatiron neighborhood, but the space has been closed due to the pandemic. The concept, which was touted in WeWork’s IPO filing, enabled the company to rent seats and desks to customers for as little as $6 for 30 minutes without requiring a membership.
A spokesman for WeWork acknowledged the layoffs Thursday, which were reported earlier by Business Insider, but declined to specify how many jobs were affected or comment on the closure of the on-demand business. “As WeWork continues to execute its strategic five-year plan we are realigning certain functions and teams to reflect our business priorities,” the spokesman wrote in an email.
WeWork, which rents out office space on short-term and flexible leases, has had a turbulent year after pulling its IPO in September and ousting the co-founder and CEO, Adam Neumann. The effects of the coronavirus pandemic have complicated the company’s future, as some customers have stopped paying rent or chosen not to renew their contracts. WeWork is, in turn, seeking relief from some of its landlords.
The problems at WeWork are also dragging down its biggest investor,SoftBank Group Corp. The Japanese company said earlier Thursday it was writing down $8.4 billion on its WeWork investment. Tensions have risen between the two companies over SoftBank’s decision to pull out of a $3 billion deal to buy WeWork shares from employees and investors, including Neumann. Two WeWork directors sued SoftBank over the withdrawal, and Neumann has indicated he could sue as well.
May 02, 2020