WeWork is slashing the lavish spending that fueled the office-sharing company’s breakneck growth while racking up unsustainable losses that ultimately turned off Wall Street investors, forcing it to shelve its initial public offering.
Not far away Lanny Grossman doesn’t get the same vibe from the WeWork near Grand Central station, where the owner of public relations firm EM50 Communications shares a two-person office.
Japanese tech conglomerate Softbank, which took an 80% stake in the company, has sent one of its executives, Marcelo Claure, to oversee WeWork’s restructuring.
WeWork has said that the layoffs will not include the small “community teams” that work inside the shared offices spaces, and many job cuts will come from sides businesses the company is selling.
Arik Benzino, WeWork’s managing director for U.S. and Canada, told the affected employees in an email last week that their pay would remain the same and their shift assignments “will not change for the time being.
”Behfar Jahanshasi, whose tech consultancy uses WeWork around the world, says he is eager to stick with the company but is watching the developments warily.
A $9.5 billion bailout from Softbank saved WeWork from possible bankruptcy, but the company now needs to reduce its reliance on venture capital and acquisitions that accounted for most of its explosive revenue growth.
