Legal

WeWork Under Investigation By NY AG

Sources have told Reuters that WeWork is under investigation by the New York State Attorney General (NYAG). While a spokesman for the NYAG declined to comment, WeWork confirmed that it had been contacted by the office of the NYAG Letitia James.

“We received an inquiry from the office of the New York State Attorney General, and are cooperating in the matter,” said a WeWork spokeswoman.

James is reportedly investigating into WeWork’s Founder and former CEO Adam Neumann to determine if he made deals to benefit his own personal finances. Neumann bought properties and leased them back to WeWork, as well as borrowed against his own stake in the company. He also wanted to charge the company almost $6 million to use his trademark of the word “We” after it changed its name to The We Company.

Neumann resigned as CEO one week before the company was forced to cancel its plans to go public in late-September. He also agreed to return the cash from the use of “We.” A spokeswoman for Neumann declined to comment.

This investigation news comes as it was just reported that WeWork is preparing to cut at least 4,000 jobs, with the announcement coming as early as this week. The layoffs are part of a five-year plan to restructure the startup. Sources told The New York Times that 2,000 to 2,500 layoffs will come from the divisions responsible for subletting office space, while another 1,000 layoffs will come from “non-core businesses” and an additional 1,000 layoffs will consist of building maintenance workers.

Earlier this month, WeWork revealed a “90-day game plan” that included changes — such as the divestiture of all its non-core businesses, including The Wing, Managed by Q, Meetup, Space IQ, Teem, Wave Garden and Conductor — and a focus on its core co-working business.

In the meantime, WeWork is under investigation by the U.S. Securities and Exchange Commission (SEC) over whether it violated financial rules when it was planning to go public.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 Mobile Order-Ahead Report, PYMNTS talks with Dan Wheeler, Wahlburgers’ SVP, on how the QSR balances security and seamlessness to secure its recently launched WahlClub loyalty program.

TRENDING RIGHT NOW