A pedestrian walks by a WeWork office on October 07, 2019 in San Francisco, California. Days after withdrawing its registration for an initial public offering, WeWork also warned employees that the company could be set to lay off nearly 2, 000 people, about 16 percent of its workforce.
Justin Sullivan | Getty Images
WeWork is laying off 2, 400 employees as it works to cut costs and right-size
In a statement, a WeWork spokesperson said the cuts were being made as part of the company’s efforts to “create a more efficient organization” and refocus on the core office-sharing business. The job reductions represent 19 % of WeWork’s total workforce, which amounted to 12, 500 employees as of June 30, according toan SEC filing.
“The process began weeks ago in regions around the world and continued this week in the US, “the spokesperson said. “This workforce reduction affects approximately 2, 400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition. These are incredibly talented professionals and we are grateful for the important roles they have played in building WeWork over the last decade. “
Leading up to the announcement,reportsof forthcoming job cuts had been circulating for weeks.The New York Timesreported on Sunday that WeWork could cut at least 4, 000 jobs across its core office-sharing business and some side ventures. In October, Marcelo Claure, WeWork’s new executive chairman,warnedthat layoffs would be on the way but didn’t say how many would be announced.
Claure said in amemo to employees earlier this weekthat the company will hold an all-hands meeting at 10 am ET on Friday to address the changes slated for the company.
The layoffs come after several tumultuous months for WeWork. In September, the beleaguered start-uppulled its IPO filingafter investors balked at its mounting losses and unusual corporate governance structure. The scrutiny forced WeWork co-founder Adam Neumannto step downfrom his role as CEO, with Sebastian Gunningham and Artie Minson stepping in as co-CEOs.
WeWork was poised torun out of moneyin a matter of weeks, but secured an11 th-hour bailout dealfrom SoftBank, its biggest investor. With a new owner in place, WeWork is expected tomake sweeping changesto its business, including divesting noncore businesses and focusing on enterprise customers, instead of small and mid-sized clients. However, the companycontinues to bleed cash, reporting $ 1. 25 billion in losses for the third quarter, widening sharply from the same period last year .