It looks like WeWork is planning to lay off approximately 4,000 people in the wake of its failed IPO in September. The cuts could come as early as this week—just in time for the start of the 2019 holiday season—the core of these cuts coming out of global ventures. Approximately 1,000 maintenance workers could also be transferred to an outside contractor with another 1,000 employees from non-core businesses will vacate the company completely.
In all, the total number of employees being released accounts for up to a third of the company’s entire workforce. However, some sources say the number could be as high as 6,000, which is closer to half of WeWork’s total roster.
The release of this announcement is just part of the company’s five-year plan aimed at overhauling the business to recover from near-bankruptcy. Sources say that WeWork employees could get the official notice as early as Tuesday of this week.
You may recall that WeWork very recently received a $10 billion bailout from the Japanese Investment firm SoftBank. With that investment, SoftBank took control of WeWork, when the IPO failed in September. At the time, SoftBank gave WeWork CEO and co-founder Adam Neumann $1.7 billion to vacate his position as chairman of the board.
Unfortunately for SoftBank, last week WeWork posted a loss of $1.25 billion in the third quarter. This only adds to SoftBank’s WeWork-related losses as the company took another hit between July and September while working on the WeWork investment. This loss was a record of $6.46 billion.
WeWork, of course, is a co-working space company that leases office space from landlords and then refurbishes them and rents them out to members who just need space to work but not necessarily a major facility. The company had planned an initial public offering in late September, but sudden losses late in the third quarter made some investors nervous and many started backing out. Questions about the company’s leadership fed those fears, and WeWork got its bailout from SoftBank. The Japanese conglomerate had announced a plan to bail out the company but it has not been clear how they will go about doing so. And now the future may be grim for both of them.