On Monday, WeWork Executive Chairman Marcelo Claure confirmed that layoffs were inevitable in an email to staff received by CNN Business. In an email, Claire said all hands scheduled for Tuesday will be moved Friday, "out of respect for the people who will be separated this week."
The ghost of rapid layoffs has hung over the company for much of the nearly two months since it failed to pull off an IPO. Employees have said many times that the cuts go to startup startup coworking, but details are scarce.
The unfolding saga highlights the risk of working for a high-tech startup. While some employees once saw their wealth on paper jump after the WeWork valuation rose to $ 47 billion in the private market, the WeWork valuation then dropped to a small fraction. WeWork has been reportedly delaying employee dismissal as it cannot afford to pay benefits before accepting a huge bailout of SoftBank ( SFTBF ) .
In an email, Claure did not specify how many people would be fired, only that "necessary elimination jobs" would "start seriously this week in the United States." Multiple reports in recent weeks say that WeWork could cut 4,000 jobs, if not more, with The New York Times reporting that many of those positions are part of its core co-working business.
WeWork declined to comment on this story.
Given the scale of the business ̵
1; branching into residential, fitness and school – those affected may include a wide range of professionals, such as engineers, architects, interior designers, and cleaning employees. About 1,000 cleaners and building maintenance workers have already said their jobs will be outsourced, according to a new Coalition coalition of WeWork employees who advocate for them.
Leading up to the layoffs, management is trying to ease concerns about layoffs by promising to prioritize the treatment of layoffs with "dignity and respect," Claire said in a separate email to the entire company more than a week ago, which was also received by CNN Business. He stressed that WeWork's business is secure.
Claure is ready to submit an updated five-year business plan to the company's board of directors on Tuesday, according to this separate email. The company plans to share the same document with staff, which will include a financial restructuring on Friday.
The company had previously stated that it would focus on its main co-operative business moving forward, seeking to sell off many start-ups acquired over the years, and to discontinue its own business bets, including its school. Meetup, one of the startup companies acquired by WeWork, began cutting employees earlier this month, according to multiple reports.
According to two sources, there are recurring calendars involving human resources and attorneys using the word Huxley, considered the code name for the abbreviations. The meetings begin on October 28.
WeWork has defined its decision to cut jobs as an attempt at the "right size" of its operations and to figure out a way forward after it has almost collapsed. In late October, SoftBank acquired majority ownership of WeWork as part of a $ 5 billion pump deal with the company following its disastrous IPO attempt. The new package has estimated WeWork at $ 8 billion.
But the upcoming layoffs have become a problem with lightning because of Neumann's golden parachute included in SoftBank's rescue package. Despite a series of criticisms of increased losses and mismanagement under his watch, Neumann was able to sell up to $ 970 million worth of stock back to SoftBank, a $ 500 million loan to repay a line of credit and a $ 185 million fee to consult SoftBank. Claire says the payout is necessary to take control of Neumann's business.
A former WeWork executive previously told CNN Business that it was "disgusting" that Neumann could take as much money off the table as the fate of workers hangs in the balance. Neumann preaches the meaning of "community," a word that appears 150 times in the company's IPO documents.
There is also a clear frustration about the conditions for removal – or lack thereof – for certain employees. A newly formed group called the WeWorkers Coalition is advocating on behalf of cleaners and building maintenance staff in the US and Canada who were told that their work will be outsourced in early December 9, according to Tweets on from the coalition.
Cleaners and building maintenance staff were given less than the agreed terms, the group said on Twitter. Last week, many of these workers were offered job offers at real estate company JLL, one of the partners that must sign by Monday or they will be terminated involuntarily from their WeWork job without splitting, they said. from the group.
Employees will lose their contribution of 401,000 employers because they will be terminated before the end of the year, among other concerns, the group said.
"The WeWorkers Coalition believes that the company is not fulfilling its promise to treat its employees with" dignity and respect ". during this restructuring process. Our hardworking colleagues deserve better than that, "the group says in on twitter.