Inside WeWork’s week from hell: How the mass layoffs went down
When staffers in WeWork’s New York City headquarters received a calendar invite this week for a mandatory meeting with a note telling them to “bring your laptop, WeWork devices, and any personal items with you,” they knew they were doomed.
For some employees, the meeting took place in a frosted-glass room at the headquarters. Staffers who spoke with CNN Business recalled an executive dryly reading a few lines apologizing for a period of uncertainty and notifying those in the room — who ranged from entry-level hires to senior-managers — that their jobs were being discontinued. Some joined by video conference to find out their fates. After that, an HR official took over to explain severance and said those laid off would receive more details by email.
The specter of layoffs had hung over the coworking company and its employees for the better part of two months since its spectacular failure to pull off a high-profile IPO. During that time, there were rumors that WeWork had been forced to delay job cuts because it couldn’t afford to pay severance. Late last month, WeWork agreed to a multibillion-dollar bailout from SoftBank.
Layoffs in the US office began on Monday but some employees had to wait until late in the week to find out whether they would be let go. WeWork slashed jobs in divisions across its US operations, including human resources, growth, architecture, engineering, and corporate technology, according to a source and public social media posts. (WeWork previously declined to comment on this.) Meanwhile, the company stayed quiet for days on just how many employees would ultimately lose their jobs, despite jarring reports that it could end up totaling 4,000 people or more.
On Thursday, the company finally put a number to the job cuts: Approximately 2,400 employees would lose their jobs globally as part of its efforts to curb costs and find a viable path forward. That doesn’t include the roughly 1,000 cleaning and building maintenance staffers whose jobs are being outsourced but who were given the opportunity to take new jobs at an outsourcing partner.
The sweeping layoffs capped off a remarkable comedown for the high-flying tech startup that ballooned to more than 12,000 employees as of June of this year, according to its IPO prospectus. The company continued to ramp up hiring throughout the summer. At one time, employees had watched their paper wealth soar as WeWork’s valuation rose as high as $47 billion on the private market. WeWork’s valuation has since collapsed to roughly $8 billion.
To make matters more complicated, WeWork’s cofounder and CEO Adam Neumann was granted a massive payout as part of the SoftBank bailout despite all but running the company into the ground. “He’s got the chutzpah to turn around and take this money off the table. I think it is disgusting,” one former executive previously told CNN Business, expressing outrage on behalf of employees still with the company.
At the end of this brutal week, WeWork’s recently appointed executive chairman, Marcelo Claure, briefed employees on the path forward. At an all-hands meeting on Friday morning, he addressed the layoffs, made several new leadership announcements and briefed staffers on a six-point plan for the company’s future, according to a source familiar with the matter. He also shared financial goals to inch it closer to profitability after bleeding money.
Employee reactions to the layoffs were a mix of shock, disappointment and relief after what some described as a waiting game. For months, there had been waves of people leaving the company.
One former staffer said he felt “blindsided” because he had asked some higher-ups whether his job might be impacted ahead of this week’s news. “According to them, there was nothing to be worried about,” he said, noting his surprise when he received a meeting invite. He and several others spent a few minutes deciphering if the invite could be anything but the layoffs before calling loved ones.
In the same meeting where employees were told their roles were being terminated, some staffers were told they could apply for other internal jobs at WeWork. Those at the company for four years or more were given six months severance and those who were there for a shorter period were given at least four months, according to one of the sources.
By the end of the week, many employees had posted on various social media platforms about their departures. These posts highlighted the sense among some employees that they had gone on a wild journey those outside the company couldn’t fully understand. They had believed, and still do, in its mission to create better work spaces that foster community. Some expressed frustration with leadership for leading them astray, others simply praised their time at the company and the people they had met along the way.
“For all of its flaws, I do think that the vast majority of people were there because they wanted to be involved in community, there was a lot of good will and hard work,” one person, who was also let go this week, told CNN Business.
Another former employee said there was a weight lifted after receiving the meeting invite. Some staffers hugged once the meeting ended, then left the office for the last time to gather at a nearby bar. Others who didn’t lose their jobs also joined, the employee said, noting the camaraderie. They also expressed empathy for the thousands of people who remain employed by WeWork and are left to pick up the pieces.