WeWork is preparing to cut at least 4,000 people in its workforce as it seeks to stabilize after the company's crisis has amassed heavy losses and brought it to the brink of collapse, two people with knowledge of the question said.
The redundancies are expected to be announced this week and will take place as part of WeWork's global operation. According to the plan, the main activity of the company to sign office space will be releasing 2000 to 2500 employees, one of the people said. An additional 1,000 employees will leave when WeWork sells or closes non-profit enterprises, such as the private school in Manhattan that WeWork set up. In addition, approximately 1
But one of the people said the company could fire 5,000 to 6,000 employees.
Staff cuts will be included in a five-year WeWork overhaul plan, which can be presented to employees as early as Tuesday, said people who spoke on condition of anonymity to discuss the layoff plans.
Abbreviations represent the human cost of a remarkable change in WeWork's happiness. Under its co-founder and former CEO, Adam Neumann the company accumulated billions of dollars in a chaotic expansion that included adding huge office space in the world's most expensive cities, offering discounts to lure tenants and buy business. WeWork, which leases office space from landlords, repairs it and leases its customers, has delayed plans for an initial public offering at the end of September after investors were delayed by the company's losses and had questions about its corporate governance.
SoftBank, the Japanese conglomerate that is WeWork's largest external shareholder, announced last month a bailout plan for the company and is now trying to stabilize the business. But it is not clear how far the plan, based on the sale of billions of dollars of new WeWork bonds to investors, has progressed. The company's existing bond prices have fallen in recent days, a sign that investors are worried about its prospects.
WeWork reported last week that it lost $ 1.25 billion in the three months ended September, more than doubling more the company had lost in the same period a year earlier. A corporate presentation provided to investors revealed that WeWork opened nearly half of its locations in the 12 months that ended in September. Many of these sites are losing money and are likely to run out of WeWork money, which at the end of September is worth $ 2 billion.
Mr. Neumann, who agreed to cease control of WeWork after stepping down as chief executive in September, will receive a $ 1 billion exit package. As part of this, he will receive a consulting fee of $ 185 million over four years and may sell nearly $ 1 billion of his shares in SoftBank. Mr. Neumann's soft landing deepened the anger among staff when the layoffs occurred.
During a recent uprising at the company, employees formed a group The WeWorkers Coalition, which among other things, is demanding compensation for the removal of employees it deems fair.
As of December 9, cleaning jobs and facilities at WeWork will be assigned to JLL, a real estate company or one of its partners, according to an email sent to affected employees last week, which was reviewed by The New York Times . WeWork assured employees that each member of its cleaning and facility teams would retain their jobs and receive the same level of pay and comparable benefits. But employees who choose not to transfer will lose their jobs and will not receive compensation, according to a document provided to employees, which was reviewed by The Times.
The changes worried many employees, according to employee interviews and Slack messages reviewed by the Times, raising concerns that some staff members would eventually lose benefits or be forced to work on a different schedule.
In Slack reports, one WWork employee stated that hearing about outsourcing was like informing about death in the family, Another employee stated that the decision indicated that management was not concerned about the well-being of workers and made decisions based on it. which will save the company the most money.
David Jaffe-Bellani contributed to the reporting.