6 ms·

WeWork is planning to lay off up to 25% of its employees

82 points by 11eleven 7y ago

big_chungus 7y ago
I hope everyone can take break from the we-work-bashing for a few minutes and agree that regardless of screwy business models, almost four thousand people being laid off is sad. I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion, it's still not a good thing.
- whateveracct 7y ago
  > I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion Nah, I'd say leadership is clearly at fault. Layoffs are pretty much always failures of leadership.
  - wcip 7y ago
    That's the whole point of leadership according to Simon Sinek. Leaders are granted privileges and power and in return must stand by the decisions they have made. Without that they aren't leaders but merely authorities.
    - mlthoughts2018 7y ago
      In reality though, leadership means creating Dutch Books out of your portfolio of projects and making sure any statements you make can be retroactively debated into alignment with whatever reality ended up producing. It’s a game to do this as long as you can before you get the hot potato resignation / layoff, spend 6 months relaxing on cushy severance, and then hire an expensive executive search firm to do PR and put you back on some interview circuit for the next leadership gig. Very similar to professional sports coaching (and collegiate coaching in the US).
  - dehrmann 7y ago
    I think employees are at fault for empowering him and drinking the kool aid. Though I heard they pay really well, so maybe that's a sign a lot of people were passing on them because the business looked sketchy.
- jcomis 7y ago
  >everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion Why?
  - sachdevap 7y ago
    I assume parent meant that if you work at a company, it is your responsibility to know whether the company will last for the time you intend to be there. Without knowing the risks involved, if the company goes under and it is clear that it's a scam, you losing your job is partially your responsibility.
  - fred_is_fred 7y ago
    When you join a company, especially a start-up, that is clearly and publicly losing a massive amount of money, there is some onus on you to be aware of the risk.
- bdcravens 7y ago
  Or increase the WeWork bashing: the need for these layoffs is a sign of failure. I’ve said it before in a different situation, and someone took the time to find me on Twitter to tell me what they thought: layoffs in startups (or companies pretending to be a startup) indicates that maybe those seats shouldn’t have been warm to begin with.
Mockapapella 7y ago
I first heard of WeWork a few months ago. Seemed like just another company (admittedly I did very little to look into it). How is it that this company went from filing for public offering to laying off up to 25% of it's work force (along with a ton of other things I can't think of specifically at the moment) in just a few short weeks?
- koboll 7y ago
  Investors drove up the IPO valuation to make a big exit, then everyone realized the price was bullshit and it fell apart.
- hprotagonist 7y ago
  https://www.profgalloway.com/wewtf https://www.profgalloway.com/wewtf and https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux, more or less. Once you drop a S-1 and everone gets to look in your laundry basket, any number of things can happen.
- softwaredoug 7y ago
  The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and there’s no magic secret sauce IP or tech that makes WeWork special here. In this context, WeWork has only gotten weirder and full of itself... they just seem disconnected from reality from what they are while at the same time losing money hand over fist. 1 - https://www.npr.org/2018/08/31/643774290/wework-miguel-mckelvey https://www.npr.org/2018/08/31/643774290/wework-miguel-mckel...
  - deleted 7y ago
    [deleted]
  - dehrmann 7y ago
    > there’s no magic secret sauce IP or tech that makes WeWork special here Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.
xfour 7y ago
Was almost an inevitability it seemed like with all the other news, IPO ended etc. While this is a huge deal, is it really going to change anything about the underlying business? Let's say there's only 10% of employees or some very low number. Would then the Real Estate deals put in place vs. the Revenue received for re-leasing them pencil out positive?
- rossdavidh 7y ago
  I'm no expert, but...no.
rubicon33 7y ago
Lot's of lay offs happening lately. I know two people at two different semi-hot tech startups that are laying off people.
- bdcravens 7y ago
  I wouldn’t correlate the two. Despite the focus on brand to imply the contrary, WeWork isn’t a tech company. They’re a real estate lease flipping company.
itcrowd 7y ago
Running the numbers here. WeWork has 12.500 employees with 500 locations. That means on average 25 employees per location. That sounds absurd for workspace management, especially since construction / renovations / cleaning are most likely outsourced. Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily operations of a workspace). That STILL means >10 workers per location full time. No wonder the financials don't add up.
- Yhippa 7y ago
  What is the right number of workers per location?
  - itcrowd 7y ago
    There's not one number, obviously. But if you look at a large hotel, maybe 10? Then again, WeWork isn't nearly as large as a large hotel and doesn't provide equivalent services. >10 on average per location (being generous!) is overkill. (Remember, excluding cleaning staff)
    - wott 7y ago
      Do not forget that you need about 5 employees to fill a single 24/24 365/365 work position. About 3 for a 2x8 position.
      - rosybox 7y ago
        At least at my location in SF, WeWork is not open during non-business hours. You can have office access if you as a business are leasing office space, but there's nobody there.
    - eberkund 7y ago
      I work in a company which rents a floor in a large downtown office tower and I think the number of people working there is less than 10 including cleaning staff. There is 1 security guard who I see around often and someone is usually in the management office and at the end of the day a pair of janitors come around. I've also visited WeWork offices before and you're right that they have a lot of extra employees. They usually have multiple people at the front desk checking people in, then there are people who are going around to make sure the kegs are full and the shared spaces haven't detoriated into pigstys (this is different from a typical office where Janitors come around once a day or sometimes less than that).
bithavoc 7y ago
> Minson and Gunningham are also looking to sell some of the companies WeWork purchased in recent years, as well as the Gulfstream G650 the company bought last year for $60 million That is just obscene.
einpoklum 7y ago
We Don't Work.
sg47 7y ago
WeOuttaWork
kasperni 7y ago
http://nymag.com/intelligencer/2019/09/what-happened-at-we-why-wework-postponed-its-ipo.html http://nymag.com/intelligencer/2019/09/what-happened-at-we-w... is a really good read. Neumann does come away as a bit over the top: > “I rarely give away my power, and when I do, it’s to my wife,” who he said was “99 percent right,” according to multiple people who watched the speech. Neumann concluded with yet another moment of life coaching: “Change your inner self. Change the world.” > "The S-1 detailed the extent to which Neumann controlled his company, and had benefited personally from his position: he had bought buildings in which WeWork then took out leases, and received $5.9 million in exchange for selling a set of We-related trademarks to his own company. One clause called for Rebekah to name a successor in the event of Adam’s death. The entire thing was dedicated, in an epigram, “to the energy of We — greater than any one of us but inside each of us.”"

82 points by 11eleven 7y ago

I hope everyone can take break from the we-work-bashing for a few minutes and agree that regardless of screwy business models, almost four thousand people being laid off is sad. I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion, it's still not a good thing.

whateveracct 7y ago
> I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion Nah, I'd say leadership is clearly at fault. Layoffs are pretty much always failures of leadership.
- wcip 7y ago
  That's the whole point of leadership according to Simon Sinek. Leaders are granted privileges and power and in return must stand by the decisions they have made. Without that they aren't leaders but merely authorities.
  - mlthoughts2018 7y ago
    In reality though, leadership means creating Dutch Books out of your portfolio of projects and making sure any statements you make can be retroactively debated into alignment with whatever reality ended up producing. It’s a game to do this as long as you can before you get the hot potato resignation / layoff, spend 6 months relaxing on cushy severance, and then hire an expensive executive search firm to do PR and put you back on some interview circuit for the next leadership gig. Very similar to professional sports coaching (and collegiate coaching in the US).
- dehrmann 7y ago
  I think employees are at fault for empowering him and drinking the kool aid. Though I heard they pay really well, so maybe that's a sign a lot of people were passing on them because the business looked sketchy.
jcomis 7y ago
>everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion Why?
- sachdevap 7y ago
  I assume parent meant that if you work at a company, it is your responsibility to know whether the company will last for the time you intend to be there. Without knowing the risks involved, if the company goes under and it is clear that it's a scam, you losing your job is partially your responsibility.
- fred_is_fred 7y ago
  When you join a company, especially a start-up, that is clearly and publicly losing a massive amount of money, there is some onus on you to be aware of the risk.
bdcravens 7y ago
Or increase the WeWork bashing: the need for these layoffs is a sign of failure. I’ve said it before in a different situation, and someone took the time to find me on Twitter to tell me what they thought: layoffs in startups (or companies pretending to be a startup) indicates that maybe those seats shouldn’t have been warm to begin with.

Mockapapella 7y ago

I first heard of WeWork a few months ago. Seemed like just another company (admittedly I did very little to look into it). How is it that this company went from filing for public offering to laying off up to 25% of it's work force (along with a ton of other things I can't think of specifically at the moment) in just a few short weeks?

koboll 7y ago
Investors drove up the IPO valuation to make a big exit, then everyone realized the price was bullshit and it fell apart.
hprotagonist 7y ago
https://www.profgalloway.com/wewtf https://www.profgalloway.com/wewtf and https://www.profgalloway.com/wewtf-part-deux https://www.profgalloway.com/wewtf-part-deux, more or less. Once you drop a S-1 and everone gets to look in your laundry basket, any number of things can happen.
softwaredoug 7y ago
The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and there’s no magic secret sauce IP or tech that makes WeWork special here. In this context, WeWork has only gotten weirder and full of itself... they just seem disconnected from reality from what they are while at the same time losing money hand over fist. 1 - https://www.npr.org/2018/08/31/643774290/wework-miguel-mckelvey https://www.npr.org/2018/08/31/643774290/wework-miguel-mckel...
- deleted 7y ago
  [deleted]
- dehrmann 7y ago
  > there’s no magic secret sauce IP or tech that makes WeWork special here Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.

xfour 7y ago

Was almost an inevitability it seemed like with all the other news, IPO ended etc. While this is a huge deal, is it really going to change anything about the underlying business? Let's say there's only 10% of employees or some very low number. Would then the Real Estate deals put in place vs. the Revenue received for re-leasing them pencil out positive?

rossdavidh 7y ago
I'm no expert, but...no.

rubicon33 7y ago

Lot's of lay offs happening lately. I know two people at two different semi-hot tech startups that are laying off people.

bdcravens 7y ago
I wouldn’t correlate the two. Despite the focus on brand to imply the contrary, WeWork isn’t a tech company. They’re a real estate lease flipping company.

itcrowd 7y ago

Running the numbers here. WeWork has 12.500 employees with 500 locations. That means on average 25 employees per location. That sounds absurd for workspace management, especially since construction / renovations / cleaning are most likely outsourced. Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily operations of a workspace). That STILL means >10 workers per location full time. No wonder the financials don't add up.

Yhippa 7y ago
What is the right number of workers per location?
- itcrowd 7y ago
  There's not one number, obviously. But if you look at a large hotel, maybe 10? Then again, WeWork isn't nearly as large as a large hotel and doesn't provide equivalent services. >10 on average per location (being generous!) is overkill. (Remember, excluding cleaning staff)
  - wott 7y ago
    Do not forget that you need about 5 employees to fill a single 24/24 365/365 work position. About 3 for a 2x8 position.
    - rosybox 7y ago
      At least at my location in SF, WeWork is not open during non-business hours. You can have office access if you as a business are leasing office space, but there's nobody there.
  - eberkund 7y ago
    I work in a company which rents a floor in a large downtown office tower and I think the number of people working there is less than 10 including cleaning staff. There is 1 security guard who I see around often and someone is usually in the management office and at the end of the day a pair of janitors come around. I've also visited WeWork offices before and you're right that they have a lot of extra employees. They usually have multiple people at the front desk checking people in, then there are people who are going around to make sure the kegs are full and the shared spaces haven't detoriated into pigstys (this is different from a typical office where Janitors come around once a day or sometimes less than that).

bithavoc 7y ago

> Minson and Gunningham are also looking to sell some of the companies WeWork purchased in recent years, as well as the Gulfstream G650 the company bought last year for $60 million That is just obscene.

einpoklum 7y ago

We Don't Work.

sg47 7y ago

WeOuttaWork

kasperni 7y ago

http://nymag.com/intelligencer/2019/09/what-happened-at-we-why-wework-postponed-its-ipo.html http://nymag.com/intelligencer/2019/09/what-happened-at-we-w... is a really good read. Neumann does come away as a bit over the top: > “I rarely give away my power, and when I do, it’s to my wife,” who he said was “99 percent right,” according to multiple people who watched the speech. Neumann concluded with yet another moment of life coaching: “Change your inner self. Change the world.” > "The S-1 detailed the extent to which Neumann controlled his company, and had benefited personally from his position: he had bought buildings in which WeWork then took out leases, and received $5.9 million in exchange for selling a set of We-related trademarks to his own company. One clause called for Rebekah to name a successor in the event of Adam’s death. The entire thing was dedicated, in an epigram, “to the energy of We — greater than any one of us but inside each of us.”"