WeWork axes 2,400 staff globally
Office rental company WeWork is cutting about 2,400 jobs globally in an effort to staunch its growing losses. The move follows the dramatic collapse of WeWork’s plans to raise money by listing shares on the stock market.
WeWork called the cuts “necessary” in order to “create a more efficient organisation”. The company lost nearly $1bn (£775m) in the first half of the year and had faced questions about its finances and governance.
Co-founder Adam Neumann stepped down as chief executive this autumn. Under his leadership, the firm had invested in projects of personal interest, including a school and a firm that makes artificial waves.
WeWork’s new bosses had warned staff last month to expect cuts as the firm refocused on its “core” business of renting office space.
“As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organisation,” WeWork said in a statement.
WeWork said the reductions began “weeks ago” overseas and are now affecting the US. Globally, about 2,400 people are affected.
WeWork, which rents office space to freelancers and businesses, expanded rapidly from a single office in New York to more than 500 locations around the world. It had about 12,500 employees at the end of June.
Softbank, WeWork’s biggest backer, valued it at nearly $47bn at the start of the year, but the Japanese investment company has since been forced write down that figure to about $8bn.
The drop helped to drive Softbank to its first quarterly loss in 14 years and prompted chief executive Masayoshi Son to say that his “judgement around WeWork was not right in many ways”.