WeWork, a co-working space provider, has been in news for quite some time due to its financial losses and CEO controversies. The company was founded in 2010 by Adam Neumann and Miguel McKelvey with the aim of providing affordable office spaces to startups, entrepreneurs, and freelancers. WeWork has its headquarters in New York and operates in 140 cities around the world. The company has received a total funding of $19.5 billion and was valued at $47 billion in early 2019.
WeWork started off as a simple idea of providing co-working spaces to the people who were looking for economical and flexible office spaces. The business model was an instant hit, and the company started expanding rapidly across the US and other countries. Soon, WeWork became one of the most valued start-ups in the world, and the founders became billionaires overnight.
However, things started going downhill in 2019 when the company filed for IPO. The investors were not convinced by the revenue model of the company, and the IPO was eventually called off. The CEO Adam Neumann was asked to step down, and the company went through a major restructuring exercise. One of the outcomes of this exercise was the recent layoff of 20% of WeWork India’s staff.
Reason for Layoffs:
The COVID-19 pandemic has hit the global economy hard, and WeWork India was no exception. The company’s revenue was already under pressure due to lower demand for co-working spaces, and the pandemic made the situation worse. WeWork India’s CEO, Karan Virwani, announced in May 2020 that the company had to lay off 100 employees, which accounts for 20% of its staff. The reason given for this tough decision was to ensure a sustainable structure for the company in the long run.
Number of Employees Laid Off:
As mentioned before, WeWork India laid off 100 employees, which is 20% of its staff. The layoffs were across various functions, including sales, marketing, and operations. The company has assured that it will provide a comprehensive severance package to the laid-off employees.
Statement from Company Stakeholders:
Karan Virwani, the CEO of WeWork India, issued a statement regarding the layoffs. He said, “The COVID-19 pandemic has impacted businesses across the globe, and we are no exception. We had to make this tough decision to ensure a sustainable structure for the company in the long run. We are committed to supporting the laid-off employees during this difficult time and will provide them with a comprehensive severance package.”
In conclusion, the layoff of 20% of WeWork India’s staff is a reflection of the tough times that the co-working space industry is going through. The COVID-19 pandemic has made things worse, and several companies are struggling to keep afloat. WeWork India’s decision to ensure a sustainable structure for the long run may have been a difficult one, but it was necessary. We hope that the laid-off employees find new job opportunities soon, and WeWork India bounces back stronger from this setback.