In the aftermath of WeWork’s struggles to float, the company have notified their UK staff of upcoming redundancies, as it tries to manage its losses. WeWork staff throughout both the capital and the rest of the UK have now been formally warned about these job cuts. One source has commented that there have been no official dates as to when these redundancies will occur.
Discussion about potential job cuts to WeWork have been ongoing in recent months. The leader of WeWork’s board, and SoftBank COO, Marcelo Claure announced the following on the matter of redundancies to the WeWork staff:
“I am totally committed to open and transparent communication with you” and that “Yes, there will be layoffs – I don’t know how many – and yes, we have to right-size the business to achieve positive free cash flow and profitability. But I will promise you that those that leave us will be treated with respect, dignity and fairness.” This “companywide email” was published by CNBC.
WeWork’s losses have grown enormously in the past few years as it attempted a high growth strategy by adding new offices in Shoreditch and all over London. The company’s losses increased by £68.3 million from 2017’s £7.6 million to 2018’s whopping £75.9 million. It is predicted that the company currently has over 1,000 employees in Britain, many of these workers now facing potential redundancies as the company attempts to tackle losses.
Japanese company SoftBank has also suffered recent losses due to its business with WeWork. The Investment firm offered the company $9.5 billion in support as WeWork faced potentially running out of money. SoftBank has now announced a loss of $6.5 billion for this quarter, this loss being a result of investments in both Uber and WeWork.
Founder of SoftBank Group Masayoshi Son has recently announced that his “own investment judgement” in WeWork was “really bad”, as the investment company sees its largest quarterly loss ever. This loss was also the first SoftBank had seen in 14 years. Mr Son has further announced regret for this investment “in many ways”.
These job cuts will also be hitting WeWork’s EMEA region (including Europe, the Middle East and Africa), the headquarters for this region being in the UK’s capital. A spokesperson for WeWork has commented that “WeWork is in conversation with employees in EMEA as we make changes to our operating model and workforce in light of our refocused strategy.”
The spokesperson further remarked that “Leadership has been diligent in decision making, and we are committed to treating out colleagues fairly and with respect. Looking ahead, WeWork will continue to focus on our core workspace business in the EMEA region and providing our members with an exceptional experience.”