WeWork lays off 2,400 employees

The company reported a $1.25 billion loss in the third quarter, up more than 150 percent from the same period last year.
Image: FILE PHOTO: Neumann, CEO of WeWork, speaks to guests during the TechCrunch Disrupt event in Manhattan, in New York City
In September, WeWork pulled its IPO filing after investors balked at its mounting losses and unusual corporate governance structure. The scrutiny forced founder Adam Neumann to step down from his role as CEO.Eduardo Munoz / Reuters file

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
SUBSCRIBE
/ Source: CNBC.com
By Annie Palmer, CNBC

WeWork is laying off 2,400 employees as it works to cut costs and right-size the business, the company confirmed on Thursday.

A WeWork spokesperson told CNBC in a statement: “As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organization. The process began weeks ago in regions around the world and continued this week in the U.S. This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition. These are incredibly talented professionals and we are grateful for the important roles they have played in building WeWork over the last decade.”

Leading up to the announcement, reports of forthcoming job cuts had been circulating for weeks. The New York Times reported on Sunday that WeWork could cut at least 4,000 jobs across its core office-sharing business and some side ventures. In October, Marcelo Claure, WeWork’s new executive chairman, warned that layoffs would be on the way but didn’t say how many would be announced.

Claure said in a memo to employees earlier this week that the company will hold an all-hands meeting at 10 a.m. on Friday to address the changes coming to the company.

The layoffs come after several tumultuous months for WeWork. In September, the beleaguered start-up pulled its IPO filing after investors balked at its mounting losses and unusual corporate governance structure. The scrutiny forced WeWork founder Adam Neumann to step down from his role as CEO, with Sebastian Gunningham and Artie Minson stepping in as co-CEOs.

WeWork was poised to run out of money in a matter of weeks, but secured an eleventh-hour bailout deal from SoftBank, its biggest investor. With a new owner in place, WeWork is expected to make sweeping changes to its business, including divesting non-core businesses and focusing on enterprise customers, instead of small and mid-sized clients.

The company continues to bleed cash, reporting $1.25 billion in losses in the third quarter, up more than 150 percent from the same period last year.