- WeWork has started global layoffs as the coronavirus pandemic ravages the office industry, with sales, physical product, operations, and other groups seeing cuts on Thursday.
- Other venture-backed competitors, including Knotel, Industrious, and Convene, have laid off hundreds as the pandemic drives down demand for office space.
- Earlier this month, WeWork’s outsourced cleaning provider, JLL, laid off some cleaning staff in response to the pandemic.
- For more WeWork stories, click here.
WeWork laid staff off on Thursday in cuts that could continue for the next month.
Affected departments ranged from business operations to sales to physical product, which includes design. The layoffs came via Zoom calls, as has become the norm across downsizing companies under shelter-in-place orders.
People who were laid off, who spoke under the condition of anonymity because of nondisclosure agreements, described departmental executives delivering the cuts via a script to their respective groups – chief sales officer Nick Worswick talked to the sales team, and chief product officer Hamid Hashemi spoke to physical product, for example. The executives then handed the call to human resources.
The latest cuts come on top of thousands of jobs the coworking company has slashed after its IPO imploded last year. The laid-off employees received the same severance as those affected by the November cuts: four months of salary and benefits.
The total number of cuts was not communicated to employees, said multiple sources.
In November, employees were laid off en masse, with New York employees reporting to WeWork’s Chelsea headquarters with their company-issued electronics to turn in over the course of a day.
Now, the layoffs appear to be rolled out over days and weeks. At an all-staff meeting earlier this month, CEO Sandeep Mathrani said the cuts would finish by the end of May, Bloomberg reported.
“As WeWork continues to execute its strategic five-year plan we are realigning certain functions and teams to reflect our business priorities,” a WeWork spokesman said, declining further comment.
The company also cut 74 positions in San Francisco, ranging from building management to corporate roles, the San Francisco Business Times reported earlier this week.
Many of WeWork’s venture-backed competitors have already cut staff as the coronavirus pandemic ravages the real-estate market, dampening demand for office space that sits empty during shelter-in-place orders. So far, 435 total employees have been impacted among Convene, Industrious, and Knotel.
See more: The coronavirus is a ‘nuclear bomb’ for companies like WeWork. 10 real-estate insiders lay out the future of flex-office, and how employers are preparing now.
WeWork execs had previously publicly projected confidence about weathering the coronavirus pandemic, with a March letter to investors reassuring them that the $4.4 billion in cash and cash commitments on hand at the start of 2020 was enough to execute the company’s five-year plan.
SoftBank, WeWork’s biggest investor, earlier this month scrapped a planned purchase of $3 billion worth of WeWork shares from other investors and employees, including former CEO Adam Neumann. The decision also most likely means WeWork would no longer be able to tap into a $1.1 billion credit line from the Japanese conglomerate, since that debt financing was conditioned on SoftBank completing its share-purchase plan.
And earlier on Thursday, SoftBank bumped up its estimate for how big a hit its $100 billion Vision Fund would take from its WeWork investment and subsequent bailout.
Business Insider had reported earlier this month that WeWork’s maintenance outsourcing provider cut some of its cleaning staff even as buildings stay open during the pandemic. It was unclear exactly how many of those contract employees were cut, though all staff with the title “community service associate” were laid off. A source with knowledge of the business told Business Insider that it was not a majority of the 1,000 WeWorkers who were outsourced to JLL in December.
According to its website, WeWork has not shut any of its US locations due to the coronavirus, explaining that because some of its members are essential and WeWork provides mail and other services, they can remain open. Still, members have told Business Insider they were still expected to pay WeWork April rent, even if they are nonessential businesses that cannot actually enter the space.
SoftBank-backed companies have cut more than 3,300 employees in 2020, with many of those layoffs coming before the pandemic.
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SEE ALSO: Knotel is scrambling to pay millions in bills that started stacking up before the coronavirus hit, and hasn’t paid April rent at some locations
READ MORE: $1.5 billion ZipRecruiter just laid off hundreds only days after the CEO said the economy was headed for a steep increase in hiring after the end of the coronavirus
SEE ALSO: WeWork members are getting fed up paying rent while the coworking giant tries to catch a break on its own leases. Here’s how 4 entrepreneurs are trying to get out.
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