WeWork laying off 2,400 employees in SoftBank revamp

November 22, 2019 09:33
Laid-off WeWork employees exit the firm's corporate headquarters in Manhattan, New York, on Thursday. Photo: Reuters

Office-sharing company WeWork is laying off around 2,400 employees, almost 20 percent of its workforce, as its seeks to drastically cut costs and improve its finances after a failed IPO attempt.

"As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organization,” a company spokeswoman said in a statement on Thursday, Reuters reports.

The layoffs began weeks ago overseas and continued this week in the United States.

“This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition,” New York-based WeWork added.

The company had 12,500 employees on June 30, and there are others who work for affiliates.

The groups affected by the layoffs include WeWork’s architecture unit, which has helped curate WeWork’s distinctive shared office spaces known for their modern design, and its technology department, among which are coding and software teams, sources told Reuters.

The long-anticipated layoffs are the biggest move yet by Japanese technology conglomerate SoftBank Group, which is providing a US$9.5 billion lifeline and will soon own about 80 percent of WeWork’s shares, to refocus the company on its core business.

Under co-founder and ex-CEO Adam Neumann, WeWork had become bloated and was diversifying into all kinds of areas - including setting up a school and running apartment buildings - without any clear route to profitability, Reuters noted.

WeWork shelved plans for an IPO on Sept. 30, a week after Neumann resigned as CEO.

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