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WeWork can fire thousands



WeWork prepares to lay off at least 4,000 employees as it seeks to stabilize after the company's rapid growth has caused high losses and brought to the brink of collapse, two individuals with knowledge of the Thing said.

The cuts are expected to be announced later this week and will be held throughout WeWork's worldwide operations. According to the plan, the company's core business of subletting office space would lay off 2,000 to 2,500 employees, one respondent said. Another 1,000 employees will leave the company when WeWork sells or closes noncore companies (19459004), such as a private school in Manhattan founded by WeWork (1

9459004). In addition, around 1,000 employees will be handed over to an external contractor for building maintenance. Together, these employees would represent around one third of the 12,500 employees employed by WeWork at the end of June.

However, one respondent said the company could lay off 5,000 to 6,000 employees.

The downsizing will be included in a five-year WeWork overhaul plan that could be submitted to employees on Tuesday, people said, who talked about the redundancy plans on condition of anonymity.

The layoffs represent the human cost of a remarkable reversal of WeWork's fortune. Under his co-founder and former CEO Adam Neumann, the company put billions of dollars into an unpredictable expansion, adding huge office space in the world's most expensive cities, the Offering discounts to tenants and buying other houses included companies. WeWork, which leases office space from landlords, refurbishes and leases them to its customers. IPO plans were dropped at the end of September after investors were deterred by the company's losses and had questions about corporate governance.

SoftBank, the Japanese conglomerate, which is WeWorks largest outside shareholder, announced a plan to rescue the company last month and is now trying to stabilize the business. However, it is not clear to what extent the plan, which is based on the sale of billions of dollars of new WeWork bonds to investors, has progressed. The company's existing bond prices have fallen in recent days, a sign that investors are worried about the outlook.

WeWork announced last week that it lost $ 1.25 billion in the three months ended in September, more than twice as much as the previous year, and had lost a year earlier over the same period. A company presentation to investors revealed that WeWork opened nearly half of its locations in the twelve months ended in September. Many of these locations are losing money and are likely to run low on WeWork's cash, which stood at $ 2 billion at the end of September.

Mr. Neumann, who after resigning from the management in September agreed to relinquish control over WeWork, receives an exit package worth approximately $ 1 billion. As part of that, he receives a $ 185 million consulting fee for four years and can sell nearly $ 1 billion of his shares to SoftBank. The gentle landing for Mr. Neumann deepened the anger among the employees as the layoffs threatened.


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