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article imageWeWork plans to cut 2,000 jobs after failed IPO

By Karen Graham     Oct 5, 2019 in Business
Manhattan - In a meeting with WeWork 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, coming as soon as this month.
Just three days after withdrawing its registration for an initial public offering (IPO), WeWork informed staff of far-reaching job cuts to come by the end of the month, according to Oregon Live,
The discussion took place at WeWork’s Manhattan headquarters and was live-streamed to all employees. The executives didn't specifically say how many employees would be cut, but McKelvey and Minson said the cuts would be handled as “humanely” as possible, according to some employees 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. People familiar with the discussions estimate the job cuts to be around 2,000 or 16 percent of WeWork’s 12,500 employees, as of June, notes the Financial Post.
On September 9, WeWork cut its valuation for the second time in three days, bringing it down from $47 billion to below $20 billion over doubts about its prospects of making its market debut. Some investors had been pushing the company to postpone its IPO until 2020.
A WeWork location in Shanghai  China
A WeWork location in Shanghai, China
Not only was there a lot of skepticism concerning the company's business model, but co-founder Adam Neumann was also creating a lot of concerns over his personally investing in real estate before renting it back to WeWork. Needless to say, after the failed IPO, Neuman was forced out of his CEO position.
You could say that WeWork is stepping back a bit to gather its forces and take a broader look at what is going on. The new leadership said it plans to re-emphasize its office-rental business. They also are looking at selling some of their recent acquisitions, including event organizing platform Meetup, office management startup Managed by Q and marketing company Conductor.
The company is also canceling its upcoming WeWork Global Summit in Los Angeles, a rather lavish affair in past years. The executives urged staff to focus on the co-working business and its customers.
A WeWork representative declined to comment.
More about wework, failed IPO, Job cuts, 16 percent, growth at slower pace
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