WeWork is preparing to cut at least 4,000 jobs in a bid to achieve financial stability. Those layoffs could be announced as early as this week, The New York Times reported on Monday (Nov. 18), citing unnamed sources.
The sources said that as many as 6,000 people – half of its workforce – could get the ax, other sources said.
The layoffs are part of a five-year plan to overhaul the beleaguered office-sharing startup. The plan could be presented to employees as early as Tuesday (Nov. 19).
The sources told NYT that 2,000 to 2,500 layoffs will come from the divisions responsible for subletting office space. Another 1,000 layoffs will come from “non-core businesses, like a private school in Manhattan that WeWork set up,” the news outlet said. Another 1,000 layoffs will consist of building maintenance workers.
Adam Neumann, WeWork’s co-founder and former chief executive, steered the company into haphazard expansion, blowing billions of dollars. Aside from opening big spaces in pricey cities, he offered deep discounts to attract tenants and invested in other businesses. In September, the company deferred plans for an initial public offering after investors got cold feet due to the steep losses.
WeWork’s largest investor, Japan’s SoftBank, has a bailout plan in place to help get the company on solid financial footing. The bailout is subject to attracting new investors with billions of dollars in new WeWork bonds.
Earlier this month, WeWork revealed a “90-day game plan” that included huge changes to the company, including the divestiture of all its non-core businesses. The company will divest several ventures, including The Wing, Managed by Q, Meetup, Space IQ, Teem, Wave Garden and Conductor and focus on its core co-working business.
The first half of the year’s occupancy rates were down, WeWork said. It stands at 81 percent versus 84 percent a year ago.