Embattled co-working company WeWork is facing another set of layoffs while trying to cut expenses and rebound from a tough period that saw a failed IPO and an ousted CEO.
The Financial Times is reporting that the company is attempting to get back on a profitable track, hence the need to cut more jobs.
New CEO Sandeep Mathrani, who only joined the company a few weeks ago, reportedly told other executives that layoffs were inevitable. While the exact number of job cuts isn’t known, WeWork could potentially eliminate more than 10 percent, of its 10,000-person workforce.
The company already laid off about 2,400 people, and about 1,000 janitor and facilities jobs were moved to a vendor. WeWork also sold a number of the businesses it had acquired, which meant that hundreds of others lost their jobs as well.
Now the company also has to deal with the coronavirus problem, which isn’t good for a business where customers can easily walk away from their short-term rentals.
WeWork bonds were actually starting to recover due to some cost-cutting measures and a SoftBank rescue package, but they have fallen sharply lately in response to the wider economic concerns about the coronavirus outbreak. Bonds fell to 67 cents on the dollar and yielded almost 18 percent.
The company was set to double its global footprint in an aggressive expansion plan before it was faced with serious problems that came to light after a failed IPO attempt.
The company’s executives are also reportedly working on getting out of China, either fully or partially, because that operation is “bleeding cash.”
The new layoffs are expected to come quickly.
“Instead of doing it in stages and death by a thousand cuts . . . if you’re going to do it [layoffs], do it quickly,” said one person who knew about Mathrani’s plans.