
WeWork, Bankers Have Discussed Laying Off One-Third of Workforce - tempsy
https://www.theinformation.com/articles/wework-bankers-have-discussed-laying-off-one-third-of-workforce
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roymurdock
How have we gotten to the point where a company that is considering a $10-46B
IPO is in a position where 1/3 of its staff is redundant and can be laid off,
where investors can look at that company and think it's a good and growing
investment to sustain their public pension or hedge fund returns, where
bankers and consultants can come in and say yes deprive these 5000 people of
their income and livelihoods because we need to give the founders and early
investors an exit, where "tech" has come to be defined as a more flexible
office space leasing model that scales quickly, where the brightest new
students want to replicate another SV "tech" success by following the same
playbook.

There is something extremely wrong with the rate of innovation, productivity
growth, the division of labor and capital, and the distribution of profits
between labor and capital in developed countries today, and it's
unsustainable.

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cortesoft
> where bankers and consultants can come in and say yes deprive these 5000
> people of their income and livelihoods because we need to give the founders
> and early investors an exit

So if those 5000 people are doing work that is not valuable, we should keep
paying them to do worthless work? There are a million worthwhile things we
need people for, let's not pay them for busy work.

This is why we need a good social safety net... those people should be let go,
and find new productive work... but as you pointed out, that will be extremely
disruptive to their lives while they find new work. If we could support them
with a safety during that time, to prevent this business decision from
depriving them of their livelihood while they found a new place where their
labor was productive, we could be both economically and morally efficient.

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OedipusRex
Who deems what is "productive"? I've seen plenty of apps that were really
great get turned into shit because they were monetized or put under new
leadership.

See Snapchat, Instagram, WhatsApp, and Reddit.

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cortesoft
The market is pretty good at determining where resources should be allocated,
as long as we mitigate the known shortcomings of a market economy -
externalities, tragedy of the commons, etc.

I agree that I wish that not every app was designed to be VC style - grow to
be huge, with large revenue and expenses. I do think there are plenty of
examples of smaller, not VC growth type companies... they just, by definition,
aren't as big and popular as the high growth, large audience, ones.

~~~
ndarwincorn
> as long as we mitigate the known shortcomings of a market economy -
> externalities, tragedy of the commons, etc.

Pretty loaded caveat there. I can't think of a market economy that's actually
existed where we've adequately internalized externalities and protected the
commons.

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cortesoft
Not going to argue, but what are you suggesting we do instead? I think we work
on adding those safe guards as best we can, rather than throw out the entirety
of a market economy.

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ndarwincorn
A fair point, and I don't have a silver bullet. But wherever we talk about
markets optimizing utility we need to acknowledge that to-date that's purely
theoretical, and hand-waving away externalities and the commons has brought
the entire planet to the brink of ecological collapse.

In some ways, the tyranny and 'sub-optimal' allocation of central planning
seems preferable.

I'm more on the mandatory cooperative enterprise boat. But like I said, I
don't have a good solution.

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cortesoft
I think if you are going to point out that every market economy has failed to
properly handle externalities, you also should acknowledge that every
centrally planned forced cooperative has ended up run by abusive leaders who
do not take care of their citizens.

All systems are going to have powerful people who work the system for their
own gain... mitigating that is the primary problem of government design.

~~~
ndarwincorn
> you also should acknowledge that every centrally planned forced cooperative
> has ended up run by abusive leaders who do not take care of their citizens.

I mean, that's my point. That abusive leaders who do not take care of their
citizens in an economy centrally planned to not destroy the Earth is
preferable to a "free" one that does.

It's a false dichotomy. The capitalist world has included horrible
authoritarian governments that have perpetuated the same atrocities against
humans as your "abusive leaders", just like these centrally planned economies
haven't exactly been environmental stewards.

All else equal, I'm saying that I'd prefer a sub-optimal centrally planned
economy that guaranteed strong environmental protections.

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mharroun
Had an interview with engineering at wework... the projects they pitch were
things like creating a augmented reality system to visualize office build
outs...

I picked up the vibe that none of their engineering endevors will drive any
profits and basicly "sounds/look cool". I dont like being part of engineering
teams that are cost centers and not value ads.

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dehrmann
Every time WeWork recruiters email me, I wonder what they need this many
software engineers for. At least Uber, Lyft, Airbnb, Pinterest, etc. have a
lot of traffic from users. But WeWork?

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bontaq
I could see some pretty interesting systems for building management at scale
being created, along with projects related to desks/chair/couch reliability,
cleanability, etc. The internal dashboards for location health, product
ordering, and scheduling are probably extensive too.

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vilius
I feel sorry that WeWork receives a lot of negativity for “not going to be
profitable” and “not being a technology company”. It might be true, but as a
potential customer, I am extremely happy with their existence.

I live in Warsaw and 3 years ago there were not a single decent coworking
place. Every option seemed depressing and overpriced for their offering. Then
WeWork and their competitor Mindspace opened up. I chose the latter since it
was closer to my home and I couldn’t be happier. I assume WeWork would be the
same. Brand new building, ergonomic desk, good looking interior, many meeting
places, phone booths, free barista services, free delivery pickup service, 24h
access, free bike rental, shower, community events, even massage and manicure
is hosted few times per month. All this for $400.

The price feels as a bargain. Not sure if it’s partly covered by VC money or
is it due to competition by WeWork but as a customer I just want to thank them
and hope it continues.

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hohoho12345
That's because it is a bargain funded by VC money.

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redisman
It is a sustainable business to have "cool" coworking spaces for $400 per
month (adjusted to COL). Just not a $50B business.

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mdorazio
I don't think it is, though. WeWork's perks are a _massive_ overhead cost, on
top of the huge upfront cost of building out a space that is trendy. I have
yet to see any evidence that this model is actually sustainable, even at
smaller scale. Co-working spaces that _are_ long-term sustainable tend to be
some combination of more expensive, more boring, or less built-out.

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tombert
Heh, I got a recruiter from WeWork bothering me this morning about to see if I
was interested in "confidentially exploring this opportunity". I was debating
looking into it, but with all the crap coming out with WeWork, I think I'll
pass.

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outside1234
at least they are offering the ability to confidentially explore the
opportunity - just think if your friends found out!

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tombert
I genuinely have no idea what she meant; if I didn't think it would be a waste
of her time I would act like I'm interested to find out.

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quaquaqua1
She's trying to tell you she won't tell your boss that you are interested in
quitting your job, I think.

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tempsy
I wonder if at the end of this year we'll look back at these last 10 years and
wonder if we've really even made as much technological progress as it seems
when funding, # of unicorns, and throwing "tech company" around for every
venture-backed company has been our main proxy for "innovation."

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ackbar03
Ignore the elephant, ignore the elephant, ignore the elephant,HOLY CRAP
there's an elephant in the room!!

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smacktoward
"So _that 's_ where all this elephant crap came from."

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ww520
The couple WeWork offices I go to have pretty minimal staffing. 2 to 3 working
the front door and on-site. 2 to 3 janitorial staffs; may be even part time.
Unless they have lots of back office people, I don't see where they can cut
personnel.

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poof_he_is_gone
Meetup.com, flatiron, any of the other companies they own.

~~~
tshoaib
Ah I see, Flatiron School a quick google search cleared up. Not Flatiron
health for anyone else confused.

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Gys
Hypothetically, if I had a working solution for WeWork that would add value by
really differentiating them from most other cowork spaces (because its
technical complicated). How would I be able to sell it to them?

I would mainly be worried that they copy it after explaining and a few demos.
In the end they can hire a lot of people very quickly whatever their value is.

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outside1234
Sounds better than three thirds in bankruptcy, which is the alternative.

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rosybox
What will happen to residents? Can we end up locked out of our offices?

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0xDEFC0DE
Only if you bring an umbrella to work

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nytesky
WeWork branded padlock umbrellas — a path to profitability.

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ookblah
Why did this fall off the homepage so quickly?

