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‘We were sold off’: WeWork’s staff face uncertain future as company collapses
- zelon88 7y agoThe guy is getting $1.7bn. That is gluttonous. To put that into perspective, if you took even just $100m and divided it among the 1,000 workers laid off each one would get $100,000. Yet they get nothing. And this one man gets $1.7bn from a company that isn't even healthy enough to survive while nickle and diming janitors who get paid $24k/year. This is what late stage capitalism looks like.
- generalpass 7y agoMy guess is that it was a forced buyout? The terms of which are always painful for the forcers. As far as the employees go, anyone working for a company clearly not making any money needs to move along. Whatever consequences you suffer are at your own risk. And as far as what this might look like under socialism, the government would take money from people who have nothing to do with any of it and give it to all of the people involved in order to maintain an organization that nobody wants to do business with.
- x0x0 7y agoon the one hand, yes: folks worked for a company that lost money. So some of this is on them. However, I strongly suspect that the risk was not in any way clearly communicated to them. And you're ignoring the fact that they clearly have the resources to pay the founder another $600m or so.
- klodolph 7y ago> And as far as what this might look like under socialism, “Late stage capitalism” and “socialism” is a false dilemma. We can see the known, evil effects of late-stage capitalism, and it is appropriate to pin the blame on the systems which encourage this behavior even while acknowledging the benefits of those systems and while holding accountable actors within these systems.
- eranima 7y agoThis really has nothing to do with socialism.
- generalpass 7y ago"Late state capitalism" is a Marxist term.
- eranima 7y agoIt was coined by Werner Sombart, who was not a Marxist but rather a classical economics professor in Germany.
- generalpass 7y agoGeez, even the Wikipedia article on the term states that is Marxist. I think you are substituting "Marxist" with "as written by Marx."
- knightofmars 7y agoWerner Sombart was heavily influenced by Marx. Regardless of how you want to view him. Read his entry on Wikipedia. "Sombart, at that time, was an important Marxian, someone who used and interpreted Karl Marx — to the point that Friedrich Engels said he was the only German professor who understood Das Kapital. Sombart called himself a "convinced Marxist,"[1] but later wrote that "It had to be admitted in the end that Marx had made mistakes on many points of importance."
- willtim 7y agoCompletely agree. I don't know why you are getting downvoted, capitalism in its present form is clearly broken. The payout sum here is ludicrous, it is certainly not justified in terms of value created for society. This money has to come from somewhere and ultimately the common folk will be paying the price.
- icebraining 7y agoIsn't the money coming - if it comes - from SoftBank? Would it be better for the common folk if they kept it?
- willtim 7y agoBetter for our pension funds, yes. The stock price of SoftBank has halved in value over this event. I'm expected to fund my old age using stocks.
- icebraining 7y agoThe stock price halved because WeWork failed, regardless of his payout.
- willtim 7y agoThe money doesn't come from thin air. If SoftBank paid it out, the shareholders lose out even more so.
- foogazi 7y agoObviously someone thought it was valuable Who are we to judge what price you put on things and what you are willing to pay? no one is being forced to do anything here
- willtim 7y agoI don't think "no one is being forced to do anything here" is justification for the unprecedented inequality and the existence of billionaires.
- eranima 7y agoTurns out the neoliberal startup crowd who downvoted you doesn't want people calling out this glaring problem. Edit: ah, here they are to come downvote me
- dredmorbius 7y ago"Please don't comment about the voting on comments. It never does any good, and it makes boring reading." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html (Regardless of my agreement or disagreement with your points otherwise.)
- codegeek 7y agoI am a Capitalist but I approve this message. There has to be a sense of morality somewhere even when running a company. I truly believe that a company can make great profits while taking care of its people. I also believe that it is ok for the initial risk takers like founders/CEO to make a hell lot more money BUT not by destroying other people's lives. I don't think any private company should have any interference by the Govt. BUT every founder/owner/CEO should think about their people first. Is this even possible ? I really hope so. "Moral Capitalism" anyone ? Disclaimer: I run a small private company of 12 of us and I struggle with this everyday.
- eranima 7y agoI'm a socialist but I applaud anyone willing to stand up against amoral practices like this. Your position closely resembles Warren's opinions on this matter.
- earthtolazlo 7y agoI thought capitalism was all about rational self-interest. If there’s no government interference, what incentive is there to behave ethically? As far as I can tell the answer is “none” and that’s what we see playing out over and over again.
- jfengel 7y agoEthics are what you do when there isn't an incentive. If you're forced to do it, it's not ethics. One theory of ethics holds that it is in your long-term interest to behave ethically, even if you can't know for certain what the constraints are. They encode a heuristic wisdom for survival, and that's why we have ethics at all. But many will fail to follow that, and if they are punished in the end, it's only after many others suffer -- and are not made whole by your punishment.
- soulofmischief 7y ago> I don't think any private company should have any interference by the Govt. BUT every founder/owner/CEO should think about their people first. This amounts to an ideological viewpoint, however it doesn't map to reality. If the government doesn't step in, the worst of the worst will sift up to the top, and the most complacent will sift to the bottom. It's how things naturally fall into place. Exploitative people in an unchecked market have an unmatched advantage. If you believe in real market competition, then pure capitalism cannot work because it stifles competition by creating unfair disadvantages for CEOs who think about their people, discouraging them from acting benevolently. The problem is that you see the government as this authoritarian beast who must be kept in a cage for the safety of its people, when in reality a healthy government is its people. Government regulations in a free market are a result of the consumers who participate in the market wanting protection. In the end, you either favor consumer protection or corporate protection. Which seems more moral to you?
- fdswefsad 7y agoin Italy, I believe it used to be a crime to mismanage a company such that people lost their jobs. Anyway, such large job losses would trigger a criminal probe.
- lacker 7y agoIn Italy, I believe it used to be a crime to mismanage a company such that people lost their jobs. On an unrelated note, Italy has never had a tech startup worth a billion dollars.
- kevin_thibedeau 7y agoThis isn't a tech startup.
- rollerboi 7y agoYou're right. But man, they tried really hard to sell it as a tech startup. From their S-1 filing (emphasis mine): "We pioneered a “space-as-a-service” membership model that offers the benefits of a collaborative culture, the flexibility to scale workspace up and down as needed and the power of a worldwide community, all for a lower cost. Through iterative product development at scale and significant investment in technology infrastructure, we have demonstrated that we can build better solutions for less money. We are changing the way people work globally and, in the process, we have disrupted the largest asset class in the world—real estate." Edit: I just noticed that it continues with a MUCH better statement on the next page: "Technology is at the foundation of our global platform. Our purpose-built technology and operational expertise has allowed us to scale our core WeWork space-as-a-service offering quickly, while improving the quality of our solutions and decreasing the cost to find, build, fill and run our spaces. We have approximately 1,000 engineers, product designers and machine learning scientists that are dedicated to building, integrating and automating the complex systems we use to operate our business. As a result, we are able to deliver a premium experience to our members at a lower price relative to traditional alternatives." So uhh, honest question. What were they trying to build with those 1,000 engineers/designers/ML scientists? The company literally leases (not buys) office space to then lease out to their customers. I never understood why this business model needs "significant investment into Tech infrastructure"
- bpodgursky 7y agoAdam Neumann jacked $10B in funding from dumb, rich, foreign investors (SoftBank). Over 80% of that money was pumped into salaries and domestic real-estate deals. Why are people mad about this? Dude is a modern Robin Hood -- a national hero. Let him keep the $1.7B change.
- Apocryphon 7y agoRobin Hood didn't keep the money he stole.
- typeformer 7y agoGood rebuttal ^
- FireBeyond 7y agoInto domestic real estate deals that he often played on both sides of the coin. He was in this to build an empire and a dynasty. He tried to write his family into leadership / ownership in perpetuity. He wasn't freeing money from the "dumb, rich, foreign investors" for the good of the people, but for the good of himself. Anything that fell to the people was happenstance, and after he'd had first pickings.
- solotronics 7y agoHow about the fact that thousands of peoples lives might be disrupted or ruined by financial mismangement. People probably moved to work for wework. Leases might be defaulted on. In some markets they were the largest user of commercial real estate so I am sure it will be somewhat bad for wework to implode.
- deleted 7y ago[deleted]
- h1d 7y ago> dumb, rich They did invest in Alibaba as well as ARM and Uber and runs the SoftBank Vision Fund. They may have failed huge on this one but have been doing quite good.
- corporateslave5 7y agoSoftBank and their investors deserve this. SoftBank wanted to take wework and jam it on the stock market, then pull their money out. They knew this company was trash, they are no better than Adam Neumann. Congrats to Adam for exposing and exploiting softbanks attempts to exploit the USA stock market. In the end this will stop future cases of investors trying to jam garbage companies into the public markets, essentially stealing money from retail investors who don’t know better
- konschubert 7y agoFor, like, 3 years.
- rollerboi 7y ago>In the end this will stop future cases of investors trying to jam garbage companies into the public markets, essentially stealing money from retail investors who don’t know better History doesn't repeat itself, but it rhymes. I wish I could have hope that this wouldn't happen again in the future (banks selling an overvalued business to the public markets via IPO) But really, this has happened before and it will happen again. Human irrationality knows no bounds.
- Nasrudith 7y agoReally I would expect it to reoccur just from neural network forgetting over time alone - let alone human irrationalities. I suspect the only way that would maybe go away would be both greater transparency requirements and the ability for the market to parse all of the data in an informed way. So in other words technically possible but probably not going to happen.
- rollerboi 7y agoYou're right about "technically possible but probably not gonna happen." The part you're missing is - although the market might have access (and be able to) parse data in an "informed" way, that doesn't mean all market participants will react to that data in the same, rational manner.
- rollerboi 7y agoI don't have the sources for this atm, but I heard last night that SoftBank doesn't actually have the $9.5B it needs in funding to secure its controlling stake in WeWork. Which means the guy hasn't gotten his $1.7B yet. So Softbank needs funding to buy out the controlling stake in WeWork. They're reaching out to Japan's largest bank, Mitsubishi UFJ, for that $9.5B. As of last night, MUFJ refused to lend money to Softbank if they intend on using it as a rescue package for WeWork. Now Softbank is in a conundrum. This morning, I read that they're trying to figure out a way to slash Neuman's golden parachute from that $1.7B figure. Schadenfreude is sweet sometimes.
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- chewz 7y agoMUFG likely to turn down SoftBank loan over WeWork[1] SoftBank Seeks $2.8 Billion in Financing From Japan Banks[2] SoftBank wants to reduce WeWork rescue package[3] SoftBank Execs Discuss Trimming WeWork Offer and Adam Neumann Payout [4] [1] https://www.ft.com/content/d69e84c0-0c1b-11ea-bb52-34c8d9dc6d84 https://www.ft.com/content/d69e84c0-0c1b-11ea-bb52-34c8d9dc6... [2] https://www.bloomberg.com/news/articles/2019-11-21/softbank-said-to-seek-2-8-billion-in-financing-from-japan-banks https://www.bloomberg.com/news/articles/2019-11-21/softbank-... [3] https://therealdeal.com/2019/11/22/softbank-wants-to-reduce-wework-rescue-package/ https://therealdeal.com/2019/11/22/softbank-wants-to-reduce-... [4] https://www.bloomberg.com/news/articles/2019-11-21/softbank-execs-discuss-trimming-wework-offer-and-neumann-payout https://www.bloomberg.com/news/articles/2019-11-21/softbank-...
- rollerboi 7y agoAh, thank you. So it seems that the $9.5b is a total figure, and they're just short the $2.8B they need from MUFJ.
- dredmorbius 7y ago
- nknealk 7y agoI'd love to hear from WeWork customers about recent events. Are customers watching this thinking "oh man, I don't know if my workplace will be the same in 6 months, better start looking for alternatives?" Is the atmosphere in their offices any different now?
- whatshisface 7y agoWeWork has tons of competitors in the office space rental business, including the short-term office space rental business. WeWork's customers might even experience a step up.
- rollerboi 7y agoI might be revealing too much here, but I work for a company that leases space from WeWork, so I go to a WeWork every day and in the evenings I read about its eventual demise. (Might explain why I'm so morbidly curious about this company) The running joke in my dept is they're going to start cutting back on amenities (watered down mouthwash, less cut up fruit in the fruitwater, etc.) and we won't see as many maintenance people as we did six months ago. The private phone booths are still boarded up because of the formaldehyde issue (our booths weren't "affected" but they're still closed off). There was a meeting room with a couch that had bedbugs in it, so that was closed off for a couple weeks. We refuse to use that meeting room now. WeWork has just had its problem after problem in my time working here. We're not exactly scared (because we're a larger company and could probably just telecommute while our office is moved to another building). But we have noticed that the WeWork associates have become less chipper over time.
- seem_2211 7y agoYep. I rent a private office, and the lease is coming up next month. I'm not planning to renew.
- autokad 7y agoreally strange person. reveling for the downfall of a company that would yield negative effects on you and your coworkers. while I find this story interesting to see how things play out, what lessons learned, etc, I don't revel at all about what is happening even though it has no direct impact on me. I feel bad for those 2.5k+ employees that went from 'our company is going to go public and this is going to pay off nicely to me' to "I got nothing and now I'm being laid off". Its sad, sorry that happened to them. The wework debacle is already having negative ramifications in tech where companies are over correcting from earnings growth and investment to higher bottom lines. This will also lead to lower pay and opportunity for many tech workers. I'm not reveling.
- pastor_elm 7y agoA company that hires somebody 'at-will' has no obligation to keep them employed forever. Employees at places like WeWork, which are transparent with their unsustainable nature, should understand that and act appropriately. IMO, it's a detriment to worker's rights to believe in this sense of Big Brother Capitalist altruism.
- rexpop 7y ago"obligation" is an interesting word to use, though I agree that naïveté is detrimental to one's capacity to advocate for less-precarious working conditions.
- sieabahlpark 7y agoAnyone who stayed after the IPO fell through is an idiot. What did you expect to happen? The company is failing so apply elsewhere already
- dang 7y agoRelated from yesterday: https://news.ycombinator.com/item?id=21595493 https://news.ycombinator.com/item?id=21595493
- timwaagh 7y agoGuardian sometimes isn't the best. Their editorial philosophy in this case wont allow them to on report good news even when it is obvious. WeWork must downscale or else they are over, so these surplus staffers would ordinarily have been let go. This is normally not avoidable as there is no option to do anything else when a company must rapidly downscale. Now they get to keep their job. I think WeWork deserves a lot of credit for this. They complain their pay is bad? It is a normal salary paid for the kind of job (cleaning) that usually has to rely on the black market or extremely temporary gigs. Although the situation is pretty bad, they have managed it well.
- JohnFen 7y ago> WeWork must downscale or else they are over At this point, I think WeWork is over no matter what. The only question is how long the death throes will last.
- randycupertino 7y ago> It is a normal salary paid for the kind of job (cleaning) that usually has to rely on the black market or extremely temporary gigs. Many cleaning workers are actually unionized, the SEIU is a large union of service workers with contracts for hospitals, large office complexes, prisons, schools, etc.