INSUBCONTINENT EXCLUSIVE:
WeWork, the co-working business once valued at $47 billion, is expected to announce significant layoffs this month, Bloomberg reports
This follows reports the company was looking to slash as many as 5,000 roles, or one-third of its workforce.Now expected to go public in
2020 at a valuation as low as $10 billion, WeWork is also in negotiations with JPMorgan for a last-minute cash infusion to replace the
capital expected from the now-postponed IPO, per reports
The company, now a cautionary tale, has been working with bankers in recent weeks to reduce the sky-high costs of its money-losing
operation.News of potential layoffs come about two weeks after co-founder and chief executive officer Adam Neumann resigned from his post
and the nine-year-old company postponed its highly anticipated initial public offering
Neumann is now serving as the company’s non-executive chairman, succeeded by WeWork’s former vice chairman Sebastian Gunningham and the
company’s president and chief operating officer Artie Minson.The embattled company has been struggling to satisfy Wall Street skeptics,
who were floored by the company’s eye-popping valuation
Since Neumann’s resignation, WeWork has begun several cost-cutting initiatives and is reportedly looking to sell off several of its
acquisitions, including Managed by Q, Conductor and Meetup.Layoffs are a natural next step for the business as it aims to carve out a clear
path to profitability, now a requisite for a 2020 IPO
To float at any point in the future, after all, WeWork must prove elevating “the world’s consciousness” will eventually lead to
profits.WeWork revealed an unusual IPO prospectus in August after raising more than $8 billion in equity and debt funding
Despite financials that showed losses of nearly $1 billion in the six months ending June 30, the company still managed to accumulate a
valuation as high as $47 billion, largely as a result of Neumann’s fundraising abilities.“As co-founder of WeWork, I am so proud of this
team and the incredible company that we have built over the last decade,” Neumann said in a statement confirming his resignation
“Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members each day
While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I
have decided that it is in the best interest of the company to step down as chief executive
Thank you to my colleagues, our members, our landlord partners, and our investors for continuing to believe in this great business.”WeWork
