WeWork is set to lay off around 4,000 employees in a bid to address its financial challenges. The company’s restructuring plan includes significant layoffs, with the majority impacting its core office rental services. Additional job cuts are expected to affect other areas of the business, including the closure of a private school in Manhattan and the termination of approximately 1,000 building maintenance positions.
The layoffs come as WeWork faces severe financial difficulties, with a reported loss of $1.25 billion in the third quarter. Despite generating revenues of about $934 million during the same period, the company’s financial situation continues to worsen, with losses increasing by 150% compared to a year ago.
WeWork’s ambitious business model involved acquiring prime real estate to offer a premium product. However, the high rental costs associated with these properties have strained the company’s finances, leading to the need for drastic measures. In a pivotal move, Japan’s SoftBank provided a $5 billion bailout in October, preventing WeWork from imminent collapse. As a result of the rescue package, SoftBank now holds an 80% stake in the company.
While the full extent of the layoffs is yet to be confirmed, up to 6,000 employees may be affected. WeWork has refrained from providing detailed comments on the matter.
