WeWork is planning to lay off at least 4,000 employees as the company continues to struggle financially.
WeWork has initiated layoffs as a part of their plan to achieve financial stability. At least half of the coming layoffs are expected to hit the company’s primary service: office space rentals. Another round of layoffs is expected to hit less central parts of the business. The company runs a private school in Manhattan, which they are set to shut down. About 1,000 building maintenance employees are also expected to be laid off.
These layoffs come amid a serious financial challenge for the office space rental provider. WeWork revealed to investors last week that they had lost $1.25 billion in the third quarter. Revenues for the third quarter were about $934 million. More worryingly, the company is continuing to deteriorate financially, as losses were up 150% on the same quarter a year ago.
WeWork has launched an ambitious business model. They’ve bought out some of the most expensive real estate in the world in an effort to offer a valuable product. The extremely high rent costs have proven a bit much for the company to handle, and they have come close to falling apart. The company also received a $5 billion rescue package from Japan’s SoftBank in October. The deal saved WeWork from almost certain disaster, as they would have run out of money by the end of the month. SoftBank now holds 80% ownership in the company.
The full scope of the layoffs has yet to be determined, but it’s possible that about 6,000 employees will be affected. The company has yet to comment on the news.