WeWork's failed IPO and its ripple effects on the tech sector
WeWork’s leaders told staff that job cuts are coming as soon as this month.
In a meeting with employees Thursday, new co-chief executive officers Artie Minson and Sebastian Gunningham and co-founder Miguel McKelvey said that cost-cutting efforts would include layoffs, according to attendees. The cuts will be handled as “humanely” as possible, one executive said, according to the people, who asked not to be identified because the forum wasn’t public.
Bloomberg reported last week that WeWork parent We Co. was considering job cuts, and the eliminated positions could number in the thousands. Executives have recently pegged the amount at about 2,000, including jobs in business units that may be spun off, said people familiar with the discussions. That would be 16% of WeWork’s 12,500 employees, as of June. Deliberations are ongoing, and the number could change.
A WeWork representative declined to comment.
Minson apologized to staff at the meeting about the uncertainty that has roiled the company in recent weeks. The discussion took place at WeWork’s Manhattan headquarters, and was live-streamed to all employees.
Executives said clients and tenants were still interested in WeWork’s offerings, and implored staff to focus on its core business and customers. The executives also said they expect WeWork to continue to grow, but at a slower pace, and that the company planned to make some divestitures as part of an effort to “right-size” its business, according to the attendees.
Since WeWork’s plan for an initial public offering went badly awry, leading to the ouster of co-founder Adam Neumann as CEO, the company’s new leadership has said it plans to re-emphasize its office-rental business. As part of that, WeWork is said to be exploring a sale of several of its recent acquisitions, including event organizing platform Meetup, office management startup Managed by Q and marketing company Conductor.
The company is also canceling is upcoming WeWork Global Summit in Los Angeles, once a famously over-the-top event. One employee asked if the event would still take place in January, and was told by executives it would not go ahead. At the 2019 global summit, speakers including Jaden Smith and Adam Rippon addressed WeWork employees.