WeWork, the former darling of the startup world, may be planning to lay off thousands of its workers this week, reports the New York Times. The paper cites “two people with knowledge of the matter” who say the company will lay off up to 4,500 employees this week. However, one of those people says the layoffs could be as much as 5,000 to 6,000 employees.
WeWork currently has around 12,500 employees worldwide, which means the layoffs will amount to the company cutting anywhere from a third to almost half of its workforce. The sources tell the Times that 2,000 to 2,500 layoffs will come from the divisions responsible for subletting office space. Another 1,000 layoffs will come from “noncore businesses, like a private school in Manhattan that WeWork set up,” the Times says. WeWork will either close or sell these noncore businesses. And yet another 1,000 layoffs will be of building maintenance workers.
It’s unclear what departments the additional layoffs will come from if the 5,000 to 6,000 numbers are the correct ones. Sources told the Times that the layoffs are part of a five-year turnaround plan for the company and that they could be announced to employees on Tuesday. WeWork spent much of this year as the darling of the tech world and its IPO was expected to be one of the biggest in recent memory. However, after investors became nervous about the company’s mounting losses, the IPO was shelved and WeWork’s CEO Adam Neumann announced his departure from the company.