More than a third of WeWork’s 12,000 employees will likely receive notice this week that they no longer have a job. The layoffs are part of an effort by the struggling office-space company to cut costs, close ancillary businesses and narrow its offering to subletting office space.
In a company email sent by chairman Marcelo Claure, employees were told that layoffs will begin this week in the U.S., and that a planned all-hands meeting will be postponed from Tuesday to Friday, where Claure will present the company’s five-year plan.
“In the areas of the business that do not directly support our core business goals, we have to make some necessary job eliminations,” Claure said in the email, which was seen by The Real Deal. “We are going to eliminate and scale back certain functions and responsibilities, which will increase efficiency and also accountability.”
A person familiar with the matter told TRD that employees in the legal and human resources departments will begin receiving notice Monday.
WeWork declined to comment.
WeWork employees have waited weeks to hear notice of the layoffs, since the company abandoned plans for an IPO and had its valuation slashed from $47 billion to $8 billion. After CEO and co-founder Adam Neumann left the company in October, SoftBank, its largest investor, committed to a $9.5 billion lifeline to bail out the company, and installed a Claure to implement a turnaround strategy.
In sum, more than 4,000 people are expected to receive notice in the coming weeks, according to multiple people familiar with the matter.
Those include 1,000 maintenance workers who have been informed that their employment will be terminated on Dec. 9, according to a group of employees. The group, WeWorkers Coalition, formed in recent weeks and sent a letter to management earlier this month stating that they “don’t want to be defined by the scandals, the corruption and the greed exhibited by the company’s leadership.”
The group announced over the weekend that WeWork had reached an agreement with JLL to accept close to 1,000 maintenance and cleaning workers, many of whom would then be contracted to work in WeWork buildings.
However, the group raised alarm at the terms of the deal, and said that employees were told by WeWork to sign the terms of the contract by Monday, otherwise it would consider their resignations voluntary. The group said on Twitter that the contract has confused employees with pay discrepancies, and demanded a deadline extension.
In a separate tweet, the group added that WeWork “is not following through on its promise to treat employees with ‘dignity and respect’ during this restructuring process.”
Many employees and shareholders with stock options are also waiting to hear when a $3 billion tender offer by SoftBank will be launched, after being delayed for almost two weeks.
The post Major WeWork layoffs to begin today appeared first on The Real Deal Los Angeles.
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