The stupendously long and expensive con of WeWork, a real estate subleaser disguised as a workplace technology ecosystem, came crashing down months ago. Of course, the company’s workers are the ones now paying the price.
An estimated 2,400 of WeWork’s approximately 12,500 employees are being laid off today, according to CNBC’s Annie Palmer—a reduction representing nearly 20 per cent of staff. These drastic layoffs belie even more severe attempts to reduce overhead, though; as the New York Times reported yesterday, “an additional 1,000 employees will leave as WeWork sells or closes down noncore businesses […] roughly 1,000 building maintenance employees will be transferred to an outside contractor.” All told, WeWork is set to shrink by around a third.
Attempts to put the company on surer financial footing come, of course, after its ousted founder and former CEO Adam Neumann was awarded a sickening $US1.7 ($3) billion severance package. This amid realisations Neumann had engaged in no small amount of questionable financial transactions through the company—buying properties and leasing them to the business he ran—and other issues of potential self-dealing. Amid its failed IPO, the business functionally collapsed, requiring an additional $US9.5 ($14) billion bailout from its largest investor, Softbank.
With WeWork’s grim future written on its overvalued, subleasable walls, workers from around the company made an eleventh-hour gambit to organise for, among loftier asks, a dignified end to their jobs. “Thousands of us will be laid off in the upcoming weeks. But we want our time here to have meant something,” workers wrote in an open letter. “In the immediate term, we want those being laid off to be provided fair and reasonable separation terms commensurate with their contributions, including severance pay, continuation of company-paid health insurance and compensation for lost equity.”
It’s not clear what part this letter may have played in the layoff calculus, but according to a statement from WeWork, two of those three requests were granted.
“As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organisation. The process began weeks ago in regions around the world and continued this week in the U.S,” a spokesperson wrote. “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.”
We’ve reached out to WeWork for clarity on the equity compensation, as well as if the company plans to hold further mass layoffs.
In the wake of every WeWork, Juicero, or Theranos and the deserved public comeuppance of their spectacularly arrogant founders is a heap of regular people now left to put their lives back together.