WeWork to axe 2,400 jobs after SoftBank buyout - media reports

WeWork to axe 2,400 jobs after SoftBank buyout - media reports

WeWork to axe 2,400 jobs after SoftBank buyout - media reports

"As part of our new focus on core business WeWork, and as we have previously shared with employees, the company made the layoffs necessary to create a more efficient organization", a company spokesman said in a statement.

The severance rounds began overseas weeks ago and are now moving to the US.

The article also reports that the deal with SoftBank calls for SoftBank to buy WeWorks private shares from investors and some employees at $19.19 each, a fraction of the $110 a share price reached in January, when WeWork was valued at $47 billion.

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

Founder Adam Neumann was reportedly paid US$1.7bn to leave his post as chairman following the acquisition. The unconventional entrepreneur had faced simmering questions over his management style, loose approach to corporate governance and allegations of self-dealing - not to mention a Wall Street Journal expose which laid out Neumann's drug and alcohol use and his aspiration to become the world's first trillionaire. The group, calling itself the WeWorkers Coalition, asked that laid off employees be fairly compensated for lost equity, and that those who remain being given a bigger voice in the future of the company.

Neumann left the company's board as part of the rescue package and was replaced by SoftBank executive and newly appointed Chairman Marcelo Claure.

Layoffs began last week overseas and continues this week in the United States, said WeWork.

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.

The staff in NY which offered six months severance release if they have been with the company for at least four years and four months of severance pay for anything under it, says a former employee.

Workers who declined the offer would be considered to have voluntarily resigned, forgoing severance payments.

WeWork faces a steep road to transform itself into a self-sustaining operation with a path toward profitability. However, the company continues to bleed cash, reporting $1.25 billion in losses for the third quarter, widening sharply from the same period a year ago. It added 103 new office-sharing locations during that time period, meaning it is now saddled with the costs of building out many of those properties.

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