NEW YORK (NYTIMES) - WeWork is preparing to cut at least 4,000 people from its workforce as it tries to stabilise itself after the company's breakneck growth racked up heavy losses and led it to the brink of collapse, two people with knowledge of the matter said.
The cuts are expected to be announced as early as this week and will take place across WeWork's sprawling global operation.
Under the plan, the company's core business of subletting office space would lay off 2,000 to 2,500 employees, one of the people said. An additional 1,000 employees will leave as WeWork sells or closes down non-core businesses, like a private school in Manhattan that WeWork set up. Additionally, roughly 1,000 building maintenance employees will be transferred to an outside contractor. Together, these employees would represent around a third of the 12,500 people WeWork employed at the end of June.
But one of the people said the company could shed as many as 5,000 to 6,000 employees.
The staff reductions will be included in a five-year plan to overhaul WeWork that could be presented to employees as early as Tuesday (Nov 19), said the people, who spoke on the condition of anonymity to discuss the layoff plans.
The layoffs represent the human cost of a remarkable reversal in WeWork's fortunes. Under its co-founder and former chief executive, Adam Neumann, the company piled billions of dollars into an erratic expansion that included adding huge office spaces in the world's most expensive cities, offering discounts to lure tenants and buying other businesses. WeWork, which leases office space from landlords, refurbishes it and rents it out to its customers, shelved plans for an initial public offering in late September after investors were put off by the company's losses and had questions about its corporate governance.
SoftBank, the Japanese conglomerate that is WeWork's largest outside shareholder, last month announced a plan to bail out the company and is now trying to stabilise the business. But it is not clear how far the plan, which rests on selling billions of dollars of new WeWork bonds to investors, has progressed. The prices of the company's existing bonds have tumbled in recent days, a sign that investors are worried about its prospects.