Still at a heavy loss, WeWork laid off 2,400 employees worldwide

The startup shared the WeWork office on November 21, saying it would lay off 2,400 employees worldwide to cut costs and bring them back to business scale, according to CNBC.

In a statement, a WeWork spokeswoman said the layoffs were part of an effort to “create a more effective organization” and refocus on the core office-sharing business. The number of laid-off employees accounted for 19% of the company’s 12,500 employees as of June 30, 2019, according to a notice sent to the US Securities and Exchange Commission (SEC).

“The layoff was started a few weeks ago in regions around the world and will be done this week in the US,” a WeWork spokesman said in a statement. “The layoffs will affect about 2,400 employees globally. They will receive unemployment benefits, benefits and other forms of assistance to change jobs. These are extremely talented employees and we are grateful for their contributions to building WeWork over the past decade. ”

The decision to fire took place in the context that WeWork is facing difficult months. In September, WeWork announced that it would withdraw its initial public offering (IPO) when investors were concerned about chronic losses as well as skepticism about the business model and corporate governance style. business of this company.

The trouble surrounding WeWork caused co-founder Adam Neumann to lose his position as CEO. When we registered for an IPO in August, WeWork was estimated to be worth $ 47 billion. After the plan to issue shares failed, WeWork was launched by SoftBank for a $ 5 billion bailout package, whereby the Japanese investor took control of 80% of WeWork. The rescue set WeWork at just $ 8 billion.

For the new owner, WeWork is expected to make major changes, including withdrawing from non-core businesses and focusing on corporate customers, rather than small groups of customers. and medium.

However, this startup is still continuing to lose money. More than a week ago, WeWork reported a net loss of US $ 1.25 billion in the third quarter, doubling the same period last year.