U.S. Markets closed

WeWork Makes Small Round of Staff Cuts, Hours After Delaying IPO

Gillian Tan and Ellen Huet
1 / 2

WeWork Makes Small Round of Staff Cuts, Hours After Delaying IPO

(Bloomberg) -- Hours after announcing plans to delay an initial public offering, WeWork made a small round of job cuts in a New York City unit that manages on-demand office rentals, said three people with knowledge of the matter.

The dismissals affected fewer than 10 employees in the WeWork Now division, said two of the people, all of whom asked not to be identified because the details are private. A spokeswoman for WeWork declined to comment, citing regulatory restrictions around the IPO.

The cuts come at a chaotic time for WeWork, whose parent company We Co. postponed its IPO after criticisms about the company’s financial discipline and corporate governance. We Co. has taken some steps to address those concerns. It reduced the voting power of stock held by Adam Neumann, the chief executive officer, and reversed a plan for his wife to sit on a committee to select his successor.

The firings Tuesday could send a small signal to public investors that WeWork is willing to reduce spending. When WeWork dismissed about 300 employees in the spring, the company indicated it would then go on a hiring spree. WeWork currently employs more than 12,000 workers. Uber Technologies Inc., which has drawn rebukes from investors and from Neumann himself for its overspending, has cut more than 800 employees in the last two months.

We Co. opened its first hybrid space this year that incorporates co-working and retail, where shoppers can buy merchandise made by WeWork customers, as well as coffee and food from Bluestone Lane. It was first called Made by We but has since been renamed WeWork Now. The one and only location is in New York’s Flatiron district. A WeWork membership isn’t required to enter or to book a conference room or desk, with prices starting at $6 for 30 minutes or $65 for a day. WeWork Now also hosts talks with authors and entrepreneurs.

Julie Rice, a founder of SoulCycle, helped launch the project before leaving the company in March. In August, WeWork acquired Spacious, a startup that offers a similar service, turning restaurants into co-working spaces during the day.

To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Ellen Huet in San Francisco at ehuet4@bloomberg.net

To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, Anne VanderMey

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.