- WeWork has launched layoffs as the coronavirus pandemic has plagued the office industry and cut sales, physical products, businesses and other groups on Thursday.
- Other venture-funded competitors, including Knotel, Industrious, and Convene, have sacked hundreds as the pandemic reduces demand for office space.
- Earlier this month, WeWork's outsourced cleaning service provider, JLL, fired some cleaners in response to the pandemic.
- You can find more WeWork stories here.
WeWork fired employees on Thursday to make cuts that could continue for the next month.
The departments affected ranged from business operations to sales and physical products, including design. The layoffs were made via zoom calls, as has become the norm with shelter-in-place orders for downsizing companies.
Dismissed people who spoke on the basis of anonymity on the basis of confidentiality agreements described the department heads who sent the cuts to their respective groups via a script – sales manager Nick Worswick spoke to the sales team, and product manager Hamid Hashemi spoke about the physical product, for example . The executives then passed the call on to the human resources department.
The recent cuts add to the thousands of jobs the coworking company cut after its IPO last year. The dismissed employees received the same severance pay as those affected by the November cutbacks: four monthly salaries and social benefits.
The total number of cuts was not communicated to employees, several sources said.
In November, employees were fired in large numbers, and employees in New York reported to the WeWork headquarters in Chelsea over the course of the day with their electronics exhibited by the company.
Now the layoffs seem to be spread over days and weeks. At a meeting of all employees earlier this month, CEO Sandeep Mathrani said the cuts would be completed by the end of May. Bloomberg reported.
"As WeWork continues to implement its five-year strategic plan, we are realigning certain roles and teams to reflect our business priorities," said a WeWork spokesman and declined to comment.
The company also cut 74 jobs in San Francisco, from building management to corporate functions, the San Francisco Business Times reported earlier this week.
Many of WeWork's venture-backed companies have already cut staff as the coronavirus pandemic devastates the real estate market and dampens demand for office space that is empty when orders are placed locally. So far, a total of 435 Convene employees have been affected. Diligentand Knotel.
See more: The corona virus is an atomic bomb for companies like WeWork. 10 property insiders explain the future of the Flex Office and how employers are preparing now.
WeWork managers had previously publicly projected confidence in coping with the Coronavirus pandemic in March Letter to the investors They assured them that the $ 4.4 billion in cash and cash equivalents available at the beginning of 2020 were sufficient to implement the company's five-year plan.
SoftBank, WeWorks largest investor, canceled a proposed purchase of $ 3 billion in WeWork shares from other investors and employees, including former CEO Adam Neumann, earlier this month. The decision also most likely means that WeWork would no longer be able to draw on a $ 1.1 billion line of credit from the Japanese conglomerate, as this debt financing was made conditional on SoftBank completing its stock purchase plan.
And earlier on Thursday SoftBank has increased its estimate How successful the $ 100 billion vision fund would be from its WeWork investment and subsequent bailout.
Business Insider earlier this month reported that WeWork's maintenance outsourcing provider had cut some of its cleaning staff despite the fact that the buildings remain open during the pandemic. It was unclear how many of these contract employees were fired, despite the fact that all employees were fired with the title "Community Service Associate". A business-aware source told Business Insider that it wasn't the majority of the 1,000 WeWorkers that were outsourced to JLL in December.
According to its website, WeWork has not closed any of its U.S. locations due to the corona virus. This explains that since WeWork provides email and other services, some of its members can remain open. Even so, members of Business Insider have said they are expected to pay the WeWork April rent, even if they are non-essential companies that cannot enter the room.
SoftBank-backed companies cut more than 3,300 employees in 2020, with many of these layoffs occurring prior to the pandemic.
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