WeWork Announces Global Layoffs, Cutting 300 Jobs
WeWork announced that it will eliminate 300 jobs globally in an effort to cut costs, primarily focusing on underperforming locations.
Shares for the company dropped 3.5% to $1.53 Thursday morning.
The company’s struggles came to a head in November when it announced that it would close 40 locations, saying “demand didn’t come back as swiftly as we thought.”
WeWork estimated it would spend about $200M over the next 15 months to exit leases in those locations, with an eventual cost savings of $140M. The average remaining term on those leases was 10 years with an average occupancy of 42%, WeWork CEO Sandeep Mathrani said at the time.
The company also launched a new product featuring executive suites for finance and law firm clients, two industries that have returned to the office in greater numbers than the tech companies and startups that used to make up WeWork's base.
The trouble continued in December when Fitch Ratings downgraded the company to CCC from CCC+, citing negative metrics and a looming weaker economy in 2023. Fitch predicted that default for the coworking company was a “real possibility,” noting that should the company go into bankruptcy, it would likely reorganize rather than liquidate.
The company, which considers the just-announced job cuts part of its ongoing strategy to optimize its portfolio and streamline its operations, also announced it will release its fourth-quarter and annual financial results on Feb. 16.
While coworking has been touted by some in the industry as a possible solution to the return-to-office woes faced by some cities, lining up demand with geography has proven to be tricky.
Flex office and event company Convene also experienced financial difficulties at the end of last year, laying off dozens of workers as company leadership said it expanded too quickly following the down early days of the pandemic.
