WeWork crisis: 2,000 employees to be laid off this week by coworking firm in attempt to avoid collapse

By: |
October 15, 2019 6:07 PM

WeWork is now expected to hit the public market again in 2020 however at a valuation as little as $10 billion.

The company’s staff claimed of little work being done at the company along with new projects being put on hold.

WeWork’s embattled saga sees no sign of an end. SoftBank-backed co-working company which has 15,000 employees is likely to let go of 2,000 or 13 per cent of them as early as this week, the Guardian reported. WeWork staff said that they don’t believe the layoff will stop there. The company had decided to postpone their IPO after a failed attempt to go public that also led to the ouster of its founder and CEO Adam Neumann.

WeWork’s IPO which was supposed to be among the most celebrated listings on the Wall Street turned into amongst the biggest IPO debacles in recent times. Nor just the company’s corporate governance structure was under scrutiny but also its huge losses and valuation were in question. The company reportedly saw $933 million in 2017 and $1.9 billion in 2018, and $905 million in the first half of 2019 in losses. Its valuation also tanked from $47 billion to below $15 billion in just a few weeks, Washington Post had reported.

Also read: India ‘naturally’ emerged world’s startup capital with highest registered startups, says Piyush Goyal

The company’s staff claimed of little work being done at the company along with new projects being put on hold, said the Guardian. The employees also were wary of the influence of the Neumann’s wife Rebekah Paltrow Neumann had at the company. The company’s insiders said that Rebekah had an outsized influence on hiring and new business ideas.

WeWork is now expected to hit the public market again in 2020 however at a valuation as little as $10 billion. The company is also in talks with JPMorgan for a cash infusion of around $5 billion, Bloomberg reported, instead of selling a controlling stake to SoftBank. WeWork is present in 849 open and soon to launch locations in 123 cities globally. Majority locations are in the US, the UK, China, and India.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Google vs startups: It’s not about creating Indian app store, but a non-monopolistic one, say founders
2FICCI steps up support to startups ‘to create vibrant economy’; offers access to mentoring, funding, more
3BharatPe gears up for loans disbursal as MSMEs bounce back ahead of festive season