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Businesses

WeWork To Lay Off 2,400 Employees in SoftBank Revamp 35

Posted by msmash from the how-about-that dept.
WeWork said on Thursday it is laying off around 2,400 employees globally, as the office-sharing company seeks to drastically cut costs and stabilize its business after it transformed from a Wall Street darling into a pariah in a matter of weeks. From a report: The long-anticipated layoffs are the biggest move yet by Japanese technology investment company SoftBank Group Corp, which is providing a $9.5 billion lifeline and will soon own about 80 percent of its shares, to make sure WeWork refocuses on its core business and on trying to make money. Under co-founder and ex-CEO Adam Neumann, WeWork had become bloated, was diversifying into all kinds of areas -- including setting up a school and running apartment buildings -- and was expanding at a breakneck speed without any clear route to profitability. "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 organization," a company spokeswoman said in a statement. Further reading: WeWork's 15,000 Employees Are in Purgatory.
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WeWork To Lay Off 2,400 Employees in SoftBank Revamp More

WeWork To Lay Off 2,400 Employees in SoftBank Revamp

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  • But most likely not. SB has zero real estate experience. Remember this is not a tr h company and never was. If they put a real estate genius in charge they might make a go of it but won't ever be worth that faked up $4B IPO number. And congrats to those laid off. You're now free to find a real job with a future and got a few bucks on the way out.
    • Oops, that's $47B. And still not a tech company. And unlikely worth my $4B typo, either.

    • Real-estate wise, didn't We-Work buy up a bunch of property? With the U.S. economy doing really well and most real-estate markets pretty up, it seems like they could unload a lot of real estate for a pretty good profit...

      • Yeah, I don't know the numbers but my guess is the value of that RE is not in the billions. Someone more OCD than me is free to check their S1 filing. But long before they deal with that there's a bunch of complete crap they need to get rid of. It's almost as if he knew his company was shit and was desperately looking to pivot to something that could actually be successful.

      • Re: (Score:3)

        by gmack ( 197796 )

        I find it hard to believe they aren't turning a profit on that part. Here in Montreal, they were charging 4x the local rate for real estate rental and they were 95% full.

        I suspect it is the other business ventures that are pulling them into the red

        • Re: (Score:2, Insightful)

          by Anonymous Coward
          You just don't know how the business world works.

          Neumann bought the properties and leased them to WeWork at 6x the local rate using money from SoftBank. WeWork leased it at 4x, so they were losing money every day. Now that WeWork is insolvent, Neumann gets to keep his properties and many millions of dollars.

          In the mean time, most of the money from SoftBank was from their investors in the form of instruments like preferred shares, so their clients to the entirety of the hit and the bank made a nice pro

      • Re:Seems like they would have fallen into success (Score:4, Informative)

        by Nidi62 ( 1525137 ) on Thursday November 21, 2019 @03:22PM (#59440232)

        Real-estate wise, didn't We-Work buy up a bunch of property?

        Adam Neumann did, then leased those properties to WeWork.

      • WeWork doesn't own any property; they have long-term leases on it all, and then sublease that. At a loss. If the economy stays good, they continue to lose some money. If the economy stumbles, then rents/lease rates fall - but their costs do not drop yet they have to lower their sublease rates to retain anyone, so they lose LOTS of money.
    • Would it help if they renamed themselves to WeWillWorkMore?

  • Profitability for whom? (Score:3)

    by Nidi62 ( 1525137 ) on Thursday November 21, 2019 @03:09PM (#59440184)

    Under co-founder and ex-CEO Adam Neumann, WeWork had become bloated, was diversifying into all kinds of areas -- including setting up a school and running apartment buildings -- and was expanding at a breakneck speed without any clear route to profitability.

    Maybe not profitable for the company, but certainly profitable for Neumann, who tended to own the buildings WeWork rented out and also tried to license the name "We" to the company for millions of dollars.

  • Who are all these unnecessary people they are laying off? The kombucha bartender?

    I toured the downtown San Diego facility about a year ago. They had leased 8 floors. They were using one.

    Can they "lay off" floors? I wonder how long those leases run?

    • That's part of their problem. Long term leases, often multi year, but short term renters. They need to eat the shortfall on empty space. How long did they have 7 empty floors? Was it new? The WW place I saw in SF was full but only 1.5 floors in a fantastic location.

  • You say that like it's a bad thing (Score:3)

    by WillAffleckUW ( 858324 ) on Thursday November 21, 2019 @03:16PM (#59440202) Homepage Journal

    Seriously, how are they different from any other rental mobile office business?

    • I never could figure that out. Seems just like any other except they somehow convinced a slew of people to back them with a considerable amount of money.

    • Re: (Score:2)

      by gmack ( 197796 )

      The free coffee, tea and fruity water with beer in the afternoons, the regular conferences, the network events. Where I live they have more tenants than any other short term/ shared space outfit. Think of them like the Apple Computers of the Rental business. I had an employer who rented space there, the glass walls meant my productivity was way down, but people loved them and they were 90% full even though they charged more for rent than any of the competition.

  • Sad Poetry [besturudupoetry.xyz]

  • Time to change their name to WeDontWork.

  • that they can then rent out and make more money!

  • 12,500 (Score:3)

    by ArchieBunker ( 132337 ) on Thursday November 21, 2019 @03:27PM (#59440248)

    I can't believe they have that many employees to begin with.

    • We rented an office in a WeWork building and I did not see too many employees. Maybe 4 or 5 for 3 floors and that includes folks who deal with coffee and beer in the kitchen. They must have and army in the headquarters and in other businesses.

      • Re: (Score:2)

        by cusco ( 717999 )

        In the spaces my employer rents they had big crews to remodel to our specifications. Big utterly incompetent crews who were generally unable to provide us with a floor plan with North marked on it and who would take 6 months or more to replace the incorrect doors they had installed with the type that we specifically approved in the contract. As far as I could tell they had almost no one on board with real estate experience, nor building management experience, and perhaps a dozen competent project manager

  • If Neumann has a decent bone in his body he would personally pay a severance to every one of those workers. If he gave them each $100k it would barely scratch the surface of the money he has gained from WeWork. Of course that would never happen, greed trumps all...

  • I haven't determined if this was total mismanagement or a bubble popping? $9.5 Billion cash infusion? what?

  • WeDontWork[Anymore]

  • Well, *WE* do in HR, anyway. Business couldn't be better! We've just _overflowing_ with people to do. Everyone sees us coming and they just VANISH. Saves us work, that does.

    Someone should go read up on Youjo Senki [wikipedia.org]

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