November 22 (UPI) — WeWork, an office space-sharing start-up, announced thursday that it will cut 2,400 jobs to cut costs and restructure its business,media reported. In a statement, a WeWork spokesman said the job cuts were an important part of the company’s efforts to “create a more efficient organization” and refocus on its core shared business.
WeWork’s filings with the Securities and Exchange Commission show that the job cuts account for 19 percent of the company’s workforce. As of June 30, WeWork had 12,500 employees.
“This process started around the world a few weeks ago and will continue in the United States this week,” the spokesman added. The job cuts will affect about 2,400 employees around the world, who will receive severance pay, ongoing benefits and other forms of assistance to help them make career changes. These are talented professionals, and we appreciate their important contribution to helping WeWork grow over the past decade. “
Rumours of layoffs had been circulating for weeks before the layoffs were announced. The New York Times previously reported that WeWork could cut at least 4,000 jobs in its core sharing business and some affiliated businesses. In October, Marcelo Claure, WeWork’s new executive chairman, warned that job cuts were coming, but gave no specific figures.
The job cuts come after months of turmoil at WeWork. In September, the troubled start-up withdrew its IPO application because investors were skeptical of its mounting losses and corporate governance structure. The review forced WeWork co-founder Adam Neumann to step down as chief executive, with Sebastian Gunningham and Artie Minson taking over as co-chief executive.
Had it not been for a last-minute bailout from SoftBank, WeWork could run out of money in a matter of weeks. With new management in place, WeWork is expected to overhaul its business, including divesting non-core businesses and focusing on corporate customers rather than small and medium-sized customers. However, the company continued to lose cash, losing $1.25 billion in the third quarter, up sharply from the same period last year.