WeWork to axe 2,400 jobs after SoftBank buyout - media reports


Embattled office sharing firm WeWork will lay off 2,400 employees worldwide - about a fifth of its workforce - as it struggles to reorganize to address mounting losses, the company announced Thursday.

Over the layoffs, WeWork also said that "These are incredibly talented professionals, and we are grateful for the important roles they have played in building WeWork over the last decade".

The severance rounds began overseas weeks ago and are now moving to the US. It had about 12,500 employees at the end of June.

The departments tormented by the layoffs encompass its architecture division, which has helped curate WeWork's distinctive shared arrangement of business areas known for his or her contemporary develop, per one person conscious of the matter.

WeWork was saved from financial collapse with a $9.5 billion bailout from Japanese tech conglomerate Softbank, which now owns 80% of the company.

It shelved its plans for the IPO on September 30, because investors were wary of its growing losses, its business model and its corporate governance.

WeWork new boss has warned staff last month to expect cuts as companies refocus on the business "core" of rented office space.

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The layoffs had been widely expected in the wake of Neumann's resignation and the increased presence of SoftBank, whose investment arm recently committed $5bn to a business that burned through billions in cash and has yet to even prove itself capable of making a profit. Alex Cohen, the vice president of the company reportedly said that WeWork's payroll became bloated as it tried to keep services in house rather than outsourcing them.

In the aftermath of the announcement, WeWork's junk bond due in 2025 fell 1.125 cents on the dollar, sending its yield back to near a record high above 16 percent. Before it launched the failed IPO effort, the bond's spread was less than half that.

Neumann cashed out $700m of WeWork shares before the IPO, and is in line for a $1.7bn severance package. However, it won't affect 1,000 odd building maintenance staff and cleaners.

As part of the restructuring, it is closing or selling peripheral businesses that it set up - including the private WeGrow elementary school, which will shut its doors after the current school year. To pass the time, some WeWork staff in NY drank Fireball whiskey.

The first big wave of layoffs hit about 2,400 WeWork employees Thursday, the company told The Wall Street Journal.

Some WeWork employees have banded together into the WeWorkers Coalition, which is calling for severance pay and compensation for lost equity for laid-off employees.

"We don't want to be defined by the scandals, the corruption, and the greed exhibited by the company's leadership", employees said.