(Bloomberg) -- WeWork has had a very bad month, but even its most pessimistic observers probably didn’t expect formaldehyde to show up in the phone booths.
The beleaguered co-working company is removing 2,300 phone booths from some of its offices in the U.S. and Canada, “due to potentially elevated levels of formaldehyde caused by the manufacturer,” according to an email sent Monday to WeWork customers. The booths are small, enclosed spaces where members can talk on their cell phones or work in privacy.
A WeWork member told staff about a smell in the booths and eye irritation, which prompted the company to hire an outside consultant and test a sampling of phone booths, the email said. After getting the results back, WeWork started shutting down 1,600 booths that may have high levels of the carcinogen. It’s shuttering 700 more “out of an abundance of caution.” A spokeswoman said in a statement the company is “working to remedy this situation as quickly as possible.”
WeWork’s effort to go public went from hotly anticipated in August to widely mocked a month later. The saga led to the ousting of its chief executive officer, Adam Neumann, and a withdrawal of the stock offering prospectus. Since then, the parent company, We Co., has been scrambling for cash: It has put several of its side businesses and private jet up for sale, shuttered its private elementary school WeGrow and is planning potentially thousands of staff cuts starting this month.
The phone booths add a bizarre twist to WeWork’s many troubles. WeWork customers often work in small, shared, glass-walled offices or in open areas, so phone booths are frequently used for privacy or to avoid annoying their neighbors. At WeWork offices on Monday, staff had taped signs reading, “CAUTION: DO NOT USE” to some booths, explaining the padded box “doesn’t meet our safety standards.” For some WeWork customers, which range from small startups and entrepreneurs to large companies, the announcement explained an odor in the booths they had initially brushed off.
Brian Wisti, a programmer at dating site Coffee Meets Bagel, said he uses the phone booths at a WeWork in Seattle about once a week. He said the potential health issue doesn’t instill confidence in WeWork at a time when the company desperately needs it. “My only concern is how many more times WeWork can hit itself in the face, reputationally speaking,” Wisti said. “It’s not great when you worry about your landlord’s future.”
A WeWork member at a Minneapolis location that opened in July used the phone booths three or four times a week for calls and sometimes to eat lunch in or to have a quiet moment away from the shared office space. “They had a chemical smell, like when you get something new in the mail,” said the person, who asked not to be identified to avoid potential eviction from the office. “Because the office was recently built, we thought it was the smell of something new, but it hasn’t changed over time.”
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