NEW YORK – WeWork is slashing nearly 20% of its workforce, embarking on a painful restructuring of its money-losing operation that doomed its stock market debut and left the office-sharing company on the brink of bankruptcy.
WeWork, which has a presence in Minneapolis, said it has laid off 2,400 of its approximately 12,500 employees to "create a more efficient organization."
In an e-mail to employees earlier this week, Executive Chairman Marcelo Claure said jobs would be eliminated in areas that "do not directly support our core business goals," referring to WeWork's main office-leasing operations.
Additionally, about 1,000 cleaning and maintenance jobs in the U.S. and Canada are being outsourced to another firm that will contract the workers back to WeWork for the time being.
The New York-based company is scaling back the explosive growth that put its sleekly designed shared office spaces in 122 cities around the world while racking up massive losses that ultimately put off Wall Street investors and doomed its IPO.
WeWork is shedding side business and dumping or scaling back projects started under the grandiose but scattered vision of ousted co-founder Adam Neumann, including a Manhattan elementary school and the shared residential offering WeLive.
Claure plans to lay out a five-year turnaround a plan at companywide meeting Friday amid employee anger over the mismanagement of a company that until recently had been the darling of the startup world, valued at $47 billion in a private investment round.
WeWork was saved from financial collapse with a $9.5 bailout from Japanese tech conglomerate Softbank, which now owns 80%.