WeWork will lay off at least 4,000 people from its workforce, globally, in a bid to cut down losses. The Company had grown at an extraordinary rate and ended up making huge losses.
The layoffs will be announced this week itself. The Company’s core business of subletting office space will cut down its workforce by about 2500. A 1,000 more will be rendered jobless when WeWork sells or shuts its other non-core businesses, including a private school in Manhattan. Another 1,000 workers involved in building maintenance will be transferred to an external contractor. Simply put, about a third of WeWork’s global workforce of about 12,500, will end up without jobs very soon. There are rumours that about the number of layoffs may be higher than is reported, and that almost 5000 employees may be laid off.
Not long ago, the Company had invested heavily on expansion, adding new spacious offices in expensive cities across the globe. It had offered tenants heavy discounts and had also bought other businesses during the expansion spree. But it had to suspend an initial public offering in September when its losses began to mount, and investors began to withdraw support. The corporate governance of the Company, which leases office spaces from landlords, renovates them and then rents them out to customers, came under scrutiny.
According to recent reports, the co-sharing workspace company was hoping to rope in the CEO of T-Mobile, John Legere, after the ouster of co-founder, Adam Neumann. However, Legere seems to have no intention of leaving T-Mobile.