
WeWork is planning to lay off up to 25% of its employees - 11eleven
https://www.businessinsider.com/wework-plans-thousands-of-job-cuts-shelving-initial-public-offering-2019-10
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itcrowd
Running the numbers here. WeWork has 12.500 employees with 500 locations. That
means on average 25 employees per location. That sounds absurd for workspace
management, especially since construction / renovations / cleaning are most
likely outsourced.

Let's cut them some slack and assume that half the workforce is focused on
expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not
related to daily operations of a workspace). That STILL means >10 workers per
location full time.

No wonder the financials don't add up.

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crummy
Surely WeWork has most of their employees in just a few HQs? I'd guess they
have a lot less than 25 people per WeWork coworking office.

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itcrowd
Sorry in case I wasn't clear. I meant that, on average, 25 WeWork employees
manage / oversee a single WeWork location, not that they actually work in that
location.

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devicetray0
I've been to a location and it seemed more like <6\. Maybe <12 if they run
shifts. (I could be very wrong). The other 13 would be at the HQ, doing coding
or marketing or something

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Mockapapella
I first heard of WeWork a few months ago. Seemed like just another company
(admittedly I did very little to look into it). How is it that this company
went from filing for public offering to laying off up to 25% of it's work
force (along with a ton of other things I can't think of specifically at the
moment) in just a few short weeks?

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softwaredoug
The “How I Built This” on WeWork[1] was fascinating. Basically the 2008
financial crises increased vacancies in trendy places a lot. WeWork grew up
with the trends in coworking. But really has turned into a very fancy middle
man for turning buildings into beautiful coworking office spaces. The brand
for a while had some cache, but the thing is many are realizing that they can
also build beautiful coworking spaces and there’s no magic secret sauce IP or
tech that makes WeWork special here. In this context, WeWork has only gotten
weirder and full of itself... they just seem disconnected from reality from
what they are while at the same time losing money hand over fist.

1 - [https://www.npr.org/2018/08/31/643774290/wework-miguel-
mckel...](https://www.npr.org/2018/08/31/643774290/wework-miguel-mckelvey)

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dehrmann
> there’s no magic secret sauce IP or tech that makes WeWork special here

Indeed; they don't really have a moat. For customers who travel a lot, there
might be some network effects, but I suspect they're the minority.

~~~
softwaredoug
I think there could be something to economies of scale, but in the How I Built
That podcase, they brag about every space is bespoke!

I’d pay for a version of WeWork that let me camp out for $10 get self serve
coffee but was drab, boring, and decidedly antisocial

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mvid
Basically a library next to a coffee shop?

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softwaredoug
More libraries need to sell coffee :)

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bithavoc
> Minson and Gunningham are also looking to sell some of the companies WeWork
> purchased in recent years, as well as the Gulfstream G650 the company bought
> last year for $60 million

That is just obscene.

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kasperni
[http://nymag.com/intelligencer/2019/09/what-happened-at-
we-w...](http://nymag.com/intelligencer/2019/09/what-happened-at-we-why-
wework-postponed-its-ipo.html) is a really good read.

Neumann does come away as a bit over the top:

> “I rarely give away my power, and when I do, it’s to my wife,” who he said
> was “99 percent right,” according to multiple people who watched the speech.
> Neumann concluded with yet another moment of life coaching: “Change your
> inner self. Change the world.”

> "The S-1 detailed the extent to which Neumann controlled his company, and
> had benefited personally from his position: he had bought buildings in which
> WeWork then took out leases, and received $5.9 million in exchange for
> selling a set of We-related trademarks to his own company. One clause called
> for Rebekah to name a successor in the event of Adam’s death. The entire
> thing was dedicated, in an epigram, “to the energy of We — greater than any
> one of us but inside each of us.”"

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xfour
Was almost an inevitability it seemed like with all the other news, IPO ended
etc. While this is a huge deal, is it really going to change anything about
the underlying business?

Let's say there's only 10% of employees or some very low number. Would then
the Real Estate deals put in place vs. the Revenue received for re-leasing
them pencil out positive?

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rossdavidh
I'm no expert, but...no.

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rubicon33
Lot's of lay offs happening lately. I know two people at two different semi-
hot tech startups that are laying off people.

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bdcravens
I wouldn’t correlate the two. Despite the focus on brand to imply the
contrary, WeWork isn’t a tech company. They’re a real estate lease flipping
company.

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einpoklum
We Don't Work.

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sg47
WeOuttaWork

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big_chungus
I hope everyone can take break from the we-work-bashing for a few minutes and
agree that regardless of screwy business models, almost four thousand people
being laid off is sad. I suppose everyone is partially responsible for
understanding the viability of his company and taking that risk in an informed
fashion, it's still not a good thing.

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whateveracct
> I suppose everyone is partially responsible for understanding the viability
> of his company and taking that risk in an informed fashion

Nah, I'd say leadership is clearly at fault. Layoffs are pretty much always
failures of leadership.

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wcip
That's the whole point of leadership according to Simon Sinek. Leaders are
granted privileges and power and in return must stand by the decisions they
have made. Without that they aren't leaders but merely authorities.

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mlthoughts2018
In reality though, leadership means creating Dutch Books out of your portfolio
of projects and making sure any statements you make can be retroactively
debated into alignment with whatever reality ended up producing. It’s a game
to do this as long as you can before you get the hot potato resignation /
layoff, spend 6 months relaxing on cushy severance, and then hire an expensive
executive search firm to do PR and put you back on some interview circuit for
the next leadership gig.

Very similar to professional sports coaching (and collegiate coaching in the
US).

