Troubles for WeWork aren't slowing down with 500 tech job cuts on horizon

WeWork has seen a number of speed humps in its journey– an abandoned IPO followed by the Founder Adam Neumann stepping down from CEO

Shared office space giant WeWork is planning to trim nearly 500 employees, or a third of its workforce, from its technology division, as the company aims to cut costs, according to a media report.

Most recently, the company is also locked in negotiations with Softbank over a new $1 billion investment to enable it to go through a major restructuring after abandoning the IPO which reduced the company’s valuation drastically. New York-headquartered WeWork, which has more than 13,500 workforce, is also planning to lay off 1,500 to 2000 more employees in phases and talks are under discussion.

“About 350 of the job cuts would come from layoffs in main corporate division, while an additional 150 cuts would come from the sale of companies such as Teem and SpaceIQ that WeWork has acquired recently,” The Information, a digital media company, reported.

The job losses come after WeWork’s botched initial public offering, which was followed by the removal of its Co-Founder and Chief Executive, Adam Neumann. The move to slim down the tech division, where employee salaries and stock allocation tend to be higher, “will generate more savings as the company quickly tries to show it can trim spending”, the portal said.

Among the company’s investors is Japan’s SoftBank VisionFund, headed by SoftBank Founder and Chief Executive Masayoshi Son. Son publicly backed WeWork in an interview with Nikkei Business, saying in 10 years the company would be “making substantial profits”.

“Other divisions likely to be hit include marketing, real estate, recruiting and design,” the portal added.

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