WeWork Planning To Dismiss Thousands As It Tries To Overturn Its Assets

WeWork Planning To Dismiss Thousands As It Tries To Overturn Its Assets

Reportedly, WeWork is gearing up for cutting at least 4,000 jobs in a plan to attain financial stability and those dismissals can be declared in this week, as reported by The New York Times. The start-up might discharge up to 2,000–2,500 employees from its main office-space renting business, two sources well-known with the matter reported. Another 1,000 staff are anticipated to leave since WeWork sells or closes its noncore businesses like a private school in New York, whilst another 1,000 building maintenance workers would be shifted to an external contractor, as per the news agency. Almost 6,000 employees can eventually be laid off, one source said.

In the past week, WeWork told financiers it has lost $1.25 Billion on proceeds of $934 Million during the third quarter and the losses were up over 150% from the same time in the last year. After its hasty global expansion, counting into cities with high rent, WeWork encountered a turbulent few months. During September, it dropped plans to go public and Adam Neumann—Founder of WeWork—was replaced following attracting scrutiny from shareholders. In the last month, the start-up fetched a $5 Billion in a rescue package from SoftBank, by which the Japanese corporation took 80% rights of WeWork. CNBC earlier reported that without the contract, WeWork will run out of cash by October.

On a similar note, as per reports hemorrhaged WeWork is now fielding SEC (Securities and Exchange Commission) probe. The sources familiar with the incident said to Bloomberg that the SEC has started scrutinizing the business over apprehensions that shareholders might be misled prior to WeWork’s devastating IPO (initial public offering) that wasn’t. In September, WeWork’s parent firm had to withdraw IPO plans in the midst of some serious stares from financiers that it might not be worth what some stated to be inflated $47 Billion estimated valuation, worries that were all but validated weeks later when reports started coming in alleging the firm was very cash-poor to pay for a huge round of lay-offs.

Josh Billips
Josh Billips Author
Lead Editor At Times of Market

Josh pursued a Master of Business Administration Degree and holds deep comprehension of the Business world. He is working in this field from the last 9 years and is associated with the Times Of Market platform from the last 4 years. He holds strong management and leadership skills, which aid him to perform all the activities under the tag of Head of the Business Section. In the Business domain, he is focused on educating people on the stock market so purposely selects news topics related to the stock market. He is a disciplined and soft-spoken persona who admires precision in the work of his teammates.

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