- Convene, the Brookfield-backed shared-spaces company, furloughed 421 employees on Monday, Business Insider has learned.
- This comes days after Convene laid off 140 employees. The furloughed employees represent more than half of remaining workers.
- A spokesperson confirmed Convene will pay both its usual portion and furloughed employee’s portions of their health insurance plans through August or the end of the furlough, depending which comes first.
- Four months ago, Convene CEO Ryan Simonetti had told Business Insider he planned to add up to 500 employees in 2020 to the company’s 900-person staff.
- Convene had raised $260 million in funding, including a $152 million Series D round in the summer with investors such as the asset-management giant Brookfield and the private-equity magnate Leon Black’s family office.
- Click here for more BI Prime stories.
Convene, the events and coworking company backed by Brookfield, furloughed 421 employees on Monday, Business Insider has learned. This comes days after the company laid off nearly 150 employees.
Those furloughed employees are more than half of the remaining staff at Convene after layoffs.
The New York-based company has 30 locations in the US and London, with about half in New York. Convene had about 900 employees at the end of 2019, CEO Ryan Simonetti had told Business Insider in a November interview. At that point, he said he planned to hire 400 to 500 new employees this year to keep up with the company’s expansion.
A company spokesperson confirmed late on Tuesday that the company will pay both its usual portion and furloughed employee’s portions of their health insurance plans through August or the end of the furlough, depending on which comes first. Furloughed employees will retain their seniority, and will have their available PTO paid out on a weekly basis.
Have a tip? Contact this reporter via email at email@example.com. You can also contact Business Insider securely via SecureDrop.
Last Wednesday, the day before the layoffs, Simonetti tweeted that he will donate 100% of his compensation and executive would take salary cuts to create an employee relief fund. Furloughed employees may be eligible for a stipend from the fund and for unemployment benefits.
“The coronavirus pandemic has had a huge impact on the hospitality and meetings and event industries, and Convene has not been immune to that,” Simonetti had said in a statement to Business Insider after the original layoff announcement.
“After closing all of our locations, we have had to take the additional measure of saying goodbye to nearly 20% of our team across the company and furloughing others, while ensuring they receive compensation and healthcare coverage for an extended period. This is incredibly difficult for us, but we’re taking every measure possible to do right by our employees by providing both severance and healthcare coverage while ensuring we sustain our business for the long-term,” he added in that previous statement.
Unlike WeWork, Convene has focused on event space more than office space, offering higher-end amenities and services. As companies cancel meetings and conferences, their spaces may stay empty for some time. The company has raised $260 million in funding, including a $152 million Series D round in the summer with investors such as the asset-management giant Brookfield and the private-equity magnate Leon Black’s family office.
Earlier this month, the Financial Times reported that WeWork could have another round of layoffs affecting 1,000 staff. The venture-backed companies have not weathered an economic downturn, and with their tenants closing offices because of the pandemic in most major cities, they may struggle to keep paying customers.
The only publicly traded company in the industry, Switzerland’s IWG, has seen its stock plummet some 66% in the past month.
There have been layoffs at venture-funded flex-space companies in the hospitality business as well. On Tuesday, Sonder laid off and furloughed more than 400 employees, while Zeus Living living laid off almost 80 employees. This comes after Lyric cut 20% of its staff earlier this March, according to a report from The Real Deal.
Additional reporting by Meghan Morris.
SEE ALSO: Brookfield-backed Convene just laid off 20% of its workforce as the coronavirus upends the flex-space and events industries
SEE ALSO: Airbnb-backed Zeus Living just laid off 30% of staff as the coronavirus upends travel and hospitality startups
SEE ALSO: A Bain Capital Ventures partner says construction tech is hot and short-term-rental startups are overhyped
Join the conversation about this story »
NOW WATCH: What if humans tried landing on the sun