10 ms·

WeWork, Bankers Have Discussed Laying Off One-Third of Workforce

183 points by tempsy 7y ago

outside1234 7y ago
Sounds better than three thirds in bankruptcy, which is the alternative.
GhettoMaestro 7y ago
Good, good. Let it burn to the ground.
- gimmeThaBeet 7y ago
  hol up, that's against the lease.
  - GhettoMaestro 7y ago
    Ha ha! You made me chuckle IRL.
- s3r3nity 7y ago
  I think that's a bit harsh - it's a company with a bunch of good people working for it that will probably lose jobs through no fault of their own.
  - SomeOtherThrow 7y ago
    heh, I assumed it was a suggestion for the owners to recoup losses.
  - GhettoMaestro 7y ago
    That's how capitalism works. To pretend like it shouldn't function that way would just be making nice platitudes to allow folks like [dipshit] Adam Neumann to skate off impact-free to his next bullshit-laden adventure. There must be pain to avoid an exact repeat of this retarded chapter.
- kevin_thibedeau 7y ago
  This does read like a sequel to Office Space.
tombert 7y ago
Heh, I got a recruiter from WeWork bothering me this morning about to see if I was interested in "confidentially exploring this opportunity". I was debating looking into it, but with all the crap coming out with WeWork, I think I'll pass.
- outside1234 7y ago
  at least they are offering the ability to confidentially explore the opportunity - just think if your friends found out!
  - tombert 7y ago
    I genuinely have no idea what she meant; if I didn't think it would be a waste of her time I would act like I'm interested to find out.
    - atm0sphere 7y ago
      i think it's just a fishing expedition to keep the pipeline full. https://careers.wework.com/ https://careers.wework.com/ wonder if anyone has any historical data on the number of job openings?
    - quaquaqua1 7y ago
      She's trying to tell you she won't tell your boss that you are interested in quitting your job, I think.
- samdjohnson 7y ago
  sounds like it would be replacing an existing employee. was it for the CEO role? =)
  - tombert 7y ago
    Ha! They could start a betting pool to see if I'm even worse...I'm definitely not much of a leader.
- 7y ago
roymurdock 7y ago
How have we gotten to the point where a company that is considering a $10-46B IPO is in a position where 1/3 of its staff is redundant and can be laid off, where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns, where bankers and consultants can come in and say yes deprive these 5000 people of their income and livelihoods because we need to give the founders and early investors an exit, where "tech" has come to be defined as a more flexible office space leasing model that scales quickly, where the brightest new students want to replicate another SV "tech" success by following the same playbook. There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.
- chadlavi 7y ago
  Any company's valuation is completely divorced from their actual ability to generate revenue, their efficiency as an organization, or the value they provide to their customers. Valuations are meaningless boasts. They're a con in the literal sense; it's a confidence game. The company's officers craft the best BS story they can, and see if they can convince any investors that the investors will make money off giving them some funding. It works a lot of the time! EDIT: the "thing that's wrong" is that money is not tied at all to innovation, growth, or productivity. It's just complicated, highfalutin horse betting.
- cm2187 7y ago
  I'd rather blame that on business models that are unsustainable and rely on VC and IPO money coming in to avoid bankruptcy. At this stage we are not very far from the structure of a ponzi scheme. In fact if the company is that close to bankruptcy, I am shocked that the listing authority even green lighted the IPO.
- cjf4 7y ago
  >where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns This hasn't happened, hence all the flailing.
logfromblammo 7y ago
How about instead of cutting workers, oust the CEO, stop making payments on the leases for properties that he owns, and let him try to sue his own company while he's choking on his leverage?
- nodesocket 7y ago
  I think you are tardy to the party. Adam the CEO just stepped down.
  - whateveracct 7y ago
    That's one way to stop self-dealing. Remove the "self" instead of the "dealing"!
    - rchaud 7y ago
      Unless his stepping down voids his landlord-lessee contract with numerous WeWork properties, all this does is let Neumann continue to self-deal as a major shareholder without the bad optics of self-dealing as a CEO.
  - i_am_nomad 7y ago
    ... with his $700 million exit. The whole thing is infuriating.
bamborde_zaiku 7y ago
Could Wework collapse in 2020? Check out our analysis https://kahler.substack.com/p/could-wework-collapse-by-q2-2020 https://kahler.substack.com/p/could-wework-collapse-by-q2-20...
ackbar03 7y ago
Ignore the elephant, ignore the elephant, ignore the elephant,HOLY CRAP there's an elephant in the room!!
- smacktoward 7y ago
  "So that's where all this elephant crap came from."
rosybox 7y ago
What will happen to residents? Can we end up locked out of our offices?
- 0xDEFC0DE 7y ago
  Only if you bring an umbrella to work
  - nytesky 7y ago
    WeWork branded padlock umbrellas — a path to profitability.
- UncleOxidant 7y ago
  Let's just put it this way: I wouldn't be leaving any valuable property in your WeWork office overnight.
- jerf 7y ago
  Yes, this is the sort of situation where it could rapidly spiral into a place where the building you work in is suddenly repossessed or otherwise unavailable. I would seriously consider not leaving anything that you need on a short term basis in there. You would get it back, because no amount of financial shenanigans between WeWork and any other involved part can result in someone else owning your stuff merely because it was physically located on the property, but there could be a period of time in which you are physically unable to reach it. In theory, it really shouldn't be more than a few hours or single-digit days at most (if you can't reach your property, that's theft from you), but the reality, who knows while everything is worked out. Basically, in a nutshell, I'd suggest not leaving your computing gear in there. And you should probably form a plan B for where you and, if relevant, your team is going to work if it does close suddenly. However, that should be all that is necessary. It's not really a panic situation for you, unless you absolutely can't work from anywhere else for some reason. What I laid out above is a worst case scenario for you, and probably quite unlikely. In reality I'd still expect you to receive some sort of notice, although it's possible it'll be fairly short. (If you do decide to simply pursue other office space, you may want to get moving on that. This sort of news is going to chase a lot of WeWork tenants out, and you may want to strike a deal before they push the market up. That's one of the mechanisms I have in mind when I say this could collapse quickly; the news that they are in trouble can itself create more trouble for them.)
mharroun 7y ago
Had an interview with engineering at wework... the projects they pitch were things like creating a augmented reality system to visualize office build outs... I picked up the vibe that none of their engineering endevors will drive any profits and basicly "sounds/look cool". I dont like being part of engineering teams that are cost centers and not value ads.
- save_ferris 7y ago
  Unrelated, but my last company hired WeWork’s design arm to consult our office redesign. Upper management bragged up and down about getting one of the most talented design teams to lead our renovation. Two months later, we all get an email saying that they weren’t going to take on the project after all. The rumor was that they took the upfront consulting fees, looked at our office schematics and said “nah, this isn’t worth our time.”
- mandevil 7y ago
  "WeWork used [a sensor network that tracked everyone throughout the building combined with machine learning] to learn that people drink coffee in the morning so they should hire a barista." Source: https://twitter.com/modestproposal1/status/1085583434788020227?lang=en https://twitter.com/modestproposal1/status/10855834347880202... If that's your best example of what value technology is adding to your company, you aren't actually a technology company.
- dehrmann 7y ago
  Every time WeWork recruiters email me, I wonder what they need this many software engineers for. At least Uber, Lyft, Airbnb, Pinterest, etc. have a lot of traffic from users. But WeWork?
  - bontaq 7y ago
    I could see some pretty interesting systems for building management at scale being created, along with projects related to desks/chair/couch reliability, cleanability, etc. The internal dashboards for location health, product ordering, and scheduling are probably extensive too.
tempsy 7y ago
I wonder if at the end of this year we'll look back at these last 10 years and wonder if we've really even made as much technological progress as it seems when funding, # of unicorns, and throwing "tech company" around for every venture-backed company has been our main proxy for "innovation."
vilius 7y ago
I feel sorry that WeWork receives a lot of negativity for “not going to be profitable” and “not being a technology company”. It might be true, but as a potential customer, I am extremely happy with their existence. I live in Warsaw and 3 years ago there were not a single decent coworking place. Every option seemed depressing and overpriced for their offering. Then WeWork and their competitor Mindspace opened up. I chose the latter since it was closer to my home and I couldn’t be happier. I assume WeWork would be the same. Brand new building, ergonomic desk, good looking interior, many meeting places, phone booths, free barista services, free delivery pickup service, 24h access, free bike rental, shower, community events, even massage and manicure is hosted few times per month. All this for $400. The price feels as a bargain. Not sure if it’s partly covered by VC money or is it due to competition by WeWork but as a customer I just want to thank them and hope it continues.
- hohoho12345 7y ago
  That's because it is a bargain funded by VC money.
  - koolba 7y ago
    Which sums up a lot of what I like about Uber and Lyft too.
  - redisman 7y ago
    It is a sustainable business to have "cool" coworking spaces for $400 per month (adjusted to COL). Just not a $50B business.
    - mdorazio 7y ago
      I don't think it is, though. WeWork's perks are a massive overhead cost, on top of the huge upfront cost of building out a space that is trendy. I have yet to see any evidence that this model is actually sustainable, even at smaller scale. Co-working spaces that are long-term sustainable tend to be some combination of more expensive, more boring, or less built-out.
  - 7y ago
ww520 7y ago
The couple WeWork offices I go to have pretty minimal staffing. 2 to 3 working the front door and on-site. 2 to 3 janitorial staffs; may be even part time. Unless they have lots of back office people, I don't see where they can cut personnel.
- poof_he_is_gone 7y ago
  Meetup.com, flatiron, any of the other companies they own.
  - tshoaib 7y ago
    Ah I see, Flatiron School a quick google search cleared up. Not Flatiron health for anyone else confused.
ookblah 7y ago
Why did this fall off the homepage so quickly?
Gys 7y ago
Hypothetically, if I had a working solution for WeWork that would add value by really differentiating them from most other cowork spaces (because its technical complicated). How would I be able to sell it to them? I would mainly be worried that they copy it after explaining and a few demos. In the end they can hire a lot of people very quickly whatever their value is.

183 points by tempsy 7y ago

outside1234 7y ago

Sounds better than three thirds in bankruptcy, which is the alternative.

GhettoMaestro 7y ago

Good, good. Let it burn to the ground.

gimmeThaBeet 7y ago
hol up, that's against the lease.
- GhettoMaestro 7y ago
  Ha ha! You made me chuckle IRL.
s3r3nity 7y ago
I think that's a bit harsh - it's a company with a bunch of good people working for it that will probably lose jobs through no fault of their own.
- SomeOtherThrow 7y ago
  heh, I assumed it was a suggestion for the owners to recoup losses.
- GhettoMaestro 7y ago
  That's how capitalism works. To pretend like it shouldn't function that way would just be making nice platitudes to allow folks like [dipshit] Adam Neumann to skate off impact-free to his next bullshit-laden adventure. There must be pain to avoid an exact repeat of this retarded chapter.
kevin_thibedeau 7y ago
This does read like a sequel to Office Space.

tombert 7y ago

Heh, I got a recruiter from WeWork bothering me this morning about to see if I was interested in "confidentially exploring this opportunity". I was debating looking into it, but with all the crap coming out with WeWork, I think I'll pass.

outside1234 7y ago
at least they are offering the ability to confidentially explore the opportunity - just think if your friends found out!
- tombert 7y ago
  I genuinely have no idea what she meant; if I didn't think it would be a waste of her time I would act like I'm interested to find out.
  - atm0sphere 7y ago
    i think it's just a fishing expedition to keep the pipeline full. https://careers.wework.com/ https://careers.wework.com/ wonder if anyone has any historical data on the number of job openings?
  - quaquaqua1 7y ago
    She's trying to tell you she won't tell your boss that you are interested in quitting your job, I think.
samdjohnson 7y ago
sounds like it would be replacing an existing employee. was it for the CEO role? =)
- tombert 7y ago
  Ha! They could start a betting pool to see if I'm even worse...I'm definitely not much of a leader.
7y ago

roymurdock 7y ago

How have we gotten to the point where a company that is considering a $10-46B IPO is in a position where 1/3 of its staff is redundant and can be laid off, where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns, where bankers and consultants can come in and say yes deprive these 5000 people of their income and livelihoods because we need to give the founders and early investors an exit, where "tech" has come to be defined as a more flexible office space leasing model that scales quickly, where the brightest new students want to replicate another SV "tech" success by following the same playbook. There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.

chadlavi 7y ago
Any company's valuation is completely divorced from their actual ability to generate revenue, their efficiency as an organization, or the value they provide to their customers. Valuations are meaningless boasts. They're a con in the literal sense; it's a confidence game. The company's officers craft the best BS story they can, and see if they can convince any investors that the investors will make money off giving them some funding. It works a lot of the time! EDIT: the "thing that's wrong" is that money is not tied at all to innovation, growth, or productivity. It's just complicated, highfalutin horse betting.
cm2187 7y ago
I'd rather blame that on business models that are unsustainable and rely on VC and IPO money coming in to avoid bankruptcy. At this stage we are not very far from the structure of a ponzi scheme. In fact if the company is that close to bankruptcy, I am shocked that the listing authority even green lighted the IPO.
cjf4 7y ago
>where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns This hasn't happened, hence all the flailing.

logfromblammo 7y ago

How about instead of cutting workers, oust the CEO, stop making payments on the leases for properties that he owns, and let him try to sue his own company while he's choking on his leverage?

nodesocket 7y ago
I think you are tardy to the party. Adam the CEO just stepped down.
- whateveracct 7y ago
  That's one way to stop self-dealing. Remove the "self" instead of the "dealing"!
  - rchaud 7y ago
    Unless his stepping down voids his landlord-lessee contract with numerous WeWork properties, all this does is let Neumann continue to self-deal as a major shareholder without the bad optics of self-dealing as a CEO.
- i_am_nomad 7y ago
  ... with his $700 million exit. The whole thing is infuriating.

bamborde_zaiku 7y ago

Could Wework collapse in 2020? Check out our analysis https://kahler.substack.com/p/could-wework-collapse-by-q2-2020 https://kahler.substack.com/p/could-wework-collapse-by-q2-20...

ackbar03 7y ago

Ignore the elephant, ignore the elephant, ignore the elephant,HOLY CRAP there's an elephant in the room!!

smacktoward 7y ago
"So that's where all this elephant crap came from."

rosybox 7y ago

What will happen to residents? Can we end up locked out of our offices?

0xDEFC0DE 7y ago
Only if you bring an umbrella to work
- nytesky 7y ago
  WeWork branded padlock umbrellas — a path to profitability.
UncleOxidant 7y ago
Let's just put it this way: I wouldn't be leaving any valuable property in your WeWork office overnight.
jerf 7y ago
Yes, this is the sort of situation where it could rapidly spiral into a place where the building you work in is suddenly repossessed or otherwise unavailable. I would seriously consider not leaving anything that you need on a short term basis in there. You would get it back, because no amount of financial shenanigans between WeWork and any other involved part can result in someone else owning your stuff merely because it was physically located on the property, but there could be a period of time in which you are physically unable to reach it. In theory, it really shouldn't be more than a few hours or single-digit days at most (if you can't reach your property, that's theft from you), but the reality, who knows while everything is worked out. Basically, in a nutshell, I'd suggest not leaving your computing gear in there. And you should probably form a plan B for where you and, if relevant, your team is going to work if it does close suddenly. However, that should be all that is necessary. It's not really a panic situation for you, unless you absolutely can't work from anywhere else for some reason. What I laid out above is a worst case scenario for you, and probably quite unlikely. In reality I'd still expect you to receive some sort of notice, although it's possible it'll be fairly short. (If you do decide to simply pursue other office space, you may want to get moving on that. This sort of news is going to chase a lot of WeWork tenants out, and you may want to strike a deal before they push the market up. That's one of the mechanisms I have in mind when I say this could collapse quickly; the news that they are in trouble can itself create more trouble for them.)

mharroun 7y ago

Had an interview with engineering at wework... the projects they pitch were things like creating a augmented reality system to visualize office build outs... I picked up the vibe that none of their engineering endevors will drive any profits and basicly "sounds/look cool". I dont like being part of engineering teams that are cost centers and not value ads.

save_ferris 7y ago
Unrelated, but my last company hired WeWork’s design arm to consult our office redesign. Upper management bragged up and down about getting one of the most talented design teams to lead our renovation. Two months later, we all get an email saying that they weren’t going to take on the project after all. The rumor was that they took the upfront consulting fees, looked at our office schematics and said “nah, this isn’t worth our time.”
mandevil 7y ago
"WeWork used [a sensor network that tracked everyone throughout the building combined with machine learning] to learn that people drink coffee in the morning so they should hire a barista." Source: https://twitter.com/modestproposal1/status/1085583434788020227?lang=en https://twitter.com/modestproposal1/status/10855834347880202... If that's your best example of what value technology is adding to your company, you aren't actually a technology company.
dehrmann 7y ago
Every time WeWork recruiters email me, I wonder what they need this many software engineers for. At least Uber, Lyft, Airbnb, Pinterest, etc. have a lot of traffic from users. But WeWork?
- bontaq 7y ago
  I could see some pretty interesting systems for building management at scale being created, along with projects related to desks/chair/couch reliability, cleanability, etc. The internal dashboards for location health, product ordering, and scheduling are probably extensive too.

tempsy 7y ago

I wonder if at the end of this year we'll look back at these last 10 years and wonder if we've really even made as much technological progress as it seems when funding, # of unicorns, and throwing "tech company" around for every venture-backed company has been our main proxy for "innovation."

vilius 7y ago

I feel sorry that WeWork receives a lot of negativity for “not going to be profitable” and “not being a technology company”. It might be true, but as a potential customer, I am extremely happy with their existence. I live in Warsaw and 3 years ago there were not a single decent coworking place. Every option seemed depressing and overpriced for their offering. Then WeWork and their competitor Mindspace opened up. I chose the latter since it was closer to my home and I couldn’t be happier. I assume WeWork would be the same. Brand new building, ergonomic desk, good looking interior, many meeting places, phone booths, free barista services, free delivery pickup service, 24h access, free bike rental, shower, community events, even massage and manicure is hosted few times per month. All this for $400. The price feels as a bargain. Not sure if it’s partly covered by VC money or is it due to competition by WeWork but as a customer I just want to thank them and hope it continues.

hohoho12345 7y ago
That's because it is a bargain funded by VC money.
- koolba 7y ago
  Which sums up a lot of what I like about Uber and Lyft too.
- redisman 7y ago
  It is a sustainable business to have "cool" coworking spaces for $400 per month (adjusted to COL). Just not a $50B business.
  - mdorazio 7y ago
    I don't think it is, though. WeWork's perks are a massive overhead cost, on top of the huge upfront cost of building out a space that is trendy. I have yet to see any evidence that this model is actually sustainable, even at smaller scale. Co-working spaces that are long-term sustainable tend to be some combination of more expensive, more boring, or less built-out.
- 7y ago

ww520 7y ago

The couple WeWork offices I go to have pretty minimal staffing. 2 to 3 working the front door and on-site. 2 to 3 janitorial staffs; may be even part time. Unless they have lots of back office people, I don't see where they can cut personnel.

poof_he_is_gone 7y ago
Meetup.com, flatiron, any of the other companies they own.
- tshoaib 7y ago
  Ah I see, Flatiron School a quick google search cleared up. Not Flatiron health for anyone else confused.

ookblah 7y ago

Why did this fall off the homepage so quickly?

Gys 7y ago

Hypothetically, if I had a working solution for WeWork that would add value by really differentiating them from most other cowork spaces (because its technical complicated). How would I be able to sell it to them? I would mainly be worried that they copy it after explaining and a few demos. In the end they can hire a lot of people very quickly whatever their value is.