WeWork's strategy to recover from a disastrous attempt to go public will mean job cuts of as many as 4,000 employees, through a combination of layoffs, divestitures of the company's ancillary businesses or through transfers to a contractor, according to a person familiar with the matter.
WeWork had a 12,500-person headcount in June, according to a company filing.
In a year of disappointing tech initial public offerings, WeWork stood out for its rise and fall before the company ever went public. WeWork was valued at $47 billion in January, according to Pitchbook. Shortly thereafter, it created a parent company called We Co. and expanded into apartment rentals, data analytics and education. It filed for an IPO in August.
The company's core business is converting leased buildings into co-working spaces.
The plans to go public disintegrated after investors questioned the company's valuation as well as the leadership of former Chief Executive Officer Adam Neumann. Neumann stepped down as CEO in September.
Last month, SoftBank announced a $9.5 billion deal to take control of WeWork. Without the infusion of cash, WeWork would have run out of money this month.
The news of the job cuts was first reported by The New York Times, which said WeWork's plan involved laying off 2,000 to 2,500 people from the company's core real estate business. Another 1,000 employees would leave as the company sells or closes its other businesses including a private school, and 1,000 building maintenance workers would be transferred to a contractor, the Times reported.
WeWork declined to comment on the number of layoffs.
Business on 11/19/2019