We knew it was coming sooner or later.
After WeWork lost investor confidence through its failed initial public offering (IPO) attempt, and its valuation plummeted from US$47 billion to just US$10 – US$12 billion post-money from Softbank, the once startup darling is desperately cutting back.
Multiple reports say they have been expecting to see massive layoffs, with numbers floating around the thousands.
Ironically, this had to be delayed as the company was too short on cash to afford severance packages for all the staff who would be let go.
On the other hand, however, its co-founder and former CEO Adam Neumann was given a US$1.7 billion exit package to step down from the board.
Then on 18 November 2019, the New York Times wrote that WeWork will axe at least 4,000 staff this week, according to “two people with knowledge of the matter”.
One of the people who spoke to NY Times said the total number of staff let go could eventually be 5,000 to 6,000, nearly half of WeWork’s 12,500 headcount worldwide.
Here’s how the layoffs are broken down: The upcoming cuts will remove about 2,000 to 2,500 jobs from WeWork’s core business of subletting office space.
1,000 employees will be let go from non-core business areas, such as a private elementary school that WeWork set up in Manhattan. Another 1,000 layoffs will be executed among the company’s building maintenance workers.
This is part of a five-year plan to turn the company around.
Vulcan Post contacted WeWork Singapore to find out if this will affect any employees locally.
Stopping short of confirming whether or not the Singapore office will be facing layoffs, a WeWork spokesperson only said, “It is business-as-usual for us.”
We are focusing on our current commitments in Southeast Asia. The focus lies in sustainable growth and our path to profitability. […] The fundamentals of our business remain strong in Southeast Asia and we remain committed to the continued success locally.WeWork Singapore spokesperson
While we cannot draw much from the statement, it’s worth noting that WeWork is somehow still expanding new coworking locations in Singapore, a surprising move for a company in troubled waters.
WeWork opened its latest site at 9 Battery Road in October, with two other new spaces to be launched in December 2019.
We might have guessed that the company’s strategy was to focus its remaining resources in high-performing overseas markets, except its rapid expansion isn’t just contained within Southeast Asia.
Across the world, WeWork grew from having 528 spaces in 111 cities outlined in their IPO prospectus, to 622 spaces in 123 cities on 10 October 2019.
Its website says it will soon have 845 coworking spaces in 125 cities.
Featured Image Credit: WeWork