
‘We were sold off’: WeWork’s staff face uncertain future as company collapses - vanusa
https://www.theguardian.com/business/2019/nov/22/we-were-sold-off-weworks-support-staff-face-uncertain-future-as-company-collapses
======
rollerboi
I don't have the sources for this atm, but I heard last night that SoftBank
doesn't actually have the $9.5B it needs in funding to secure its controlling
stake in WeWork. Which means the guy hasn't gotten his $1.7B yet.

So Softbank needs funding to buy out the controlling stake in WeWork. They're
reaching out to Japan's largest bank, Mitsubishi UFJ, for that $9.5B. As of
last night, MUFJ refused to lend money to Softbank if they intend on using it
as a rescue package for WeWork.

Now Softbank is in a conundrum. This morning, I read that they're trying to
figure out a way to slash Neuman's golden parachute from that $1.7B figure.

Schadenfreude is sweet sometimes.

~~~
chewz
MUFG likely to turn down SoftBank loan over WeWork[1]

SoftBank Seeks $2.8 Billion in Financing From Japan Banks[2]

SoftBank wants to reduce WeWork rescue package[3]

SoftBank Execs Discuss Trimming WeWork Offer and Adam Neumann Payout [4]

[1] [https://www.ft.com/content/d69e84c0-0c1b-11ea-
bb52-34c8d9dc6...](https://www.ft.com/content/d69e84c0-0c1b-11ea-
bb52-34c8d9dc6d84)

[2]
[https://www.bloomberg.com/news/articles/2019-11-21/softbank-...](https://www.bloomberg.com/news/articles/2019-11-21/softbank-
said-to-seek-2-8-billion-in-financing-from-japan-banks)

[3] [https://therealdeal.com/2019/11/22/softbank-wants-to-
reduce-...](https://therealdeal.com/2019/11/22/softbank-wants-to-reduce-
wework-rescue-package/)

[4]
[https://www.bloomberg.com/news/articles/2019-11-21/softbank-...](https://www.bloomberg.com/news/articles/2019-11-21/softbank-
execs-discuss-trimming-wework-offer-and-neumann-payout)

~~~
rollerboi
Ah, thank you. So it seems that the $9.5b is a total figure, and they're just
short the $2.8B they need from MUFJ.

------
nknealk
I'd love to hear from WeWork customers about recent events. Are customers
watching this thinking "oh man, I don't know if my workplace will be the same
in 6 months, better start looking for alternatives?" Is the atmosphere in
their offices any different now?

~~~
rollerboi
I might be revealing too much here, but I work for a company that leases space
from WeWork, so I go to a WeWork every day and in the evenings I read about
its eventual demise. (Might explain why I'm so morbidly curious about this
company)

The running joke in my dept is they're going to start cutting back on
amenities (watered down mouthwash, less cut up fruit in the fruitwater, etc.)
and we won't see as many maintenance people as we did six months ago.

The private phone booths are still boarded up because of the formaldehyde
issue (our booths weren't "affected" but they're still closed off). There was
a meeting room with a couch that had bedbugs in it, so that was closed off for
a couple weeks. We refuse to use that meeting room now.

WeWork has just had its problem after problem in my time working here. We're
not exactly scared (because we're a larger company and could probably just
telecommute while our office is moved to another building). But we have
noticed that the WeWork associates have become less chipper over time.

~~~
autokad
really strange person. reveling for the downfall of a company that would yield
negative effects on you and your coworkers.

while I find this story interesting to see how things play out, what lessons
learned, etc, I don't revel at all about what is happening even though it has
no direct impact on me. I feel bad for those 2.5k+ employees that went from
'our company is going to go public and this is going to pay off nicely to me'
to "I got nothing and now I'm being laid off". Its sad, sorry that happened to
them.

The wework debacle is already having negative ramifications in tech where
companies are over correcting from earnings growth and investment to higher
bottom lines. This will also lead to lower pay and opportunity for many tech
workers. I'm not reveling.

~~~
woah
I think you might be mixing up “reveling” with “revealing”

~~~
rollerboi
I just read this after I posted a long reply... is this what they meant?? lol

------
timwaagh
Guardian sometimes isn't the best. Their editorial philosophy in this case
wont allow them to on report good news even when it is obvious. WeWork must
downscale or else they are over, so these surplus staffers would ordinarily
have been let go. This is normally not avoidable as there is no option to do
anything else when a company must rapidly downscale. Now they get to keep
their job. I think WeWork deserves a lot of credit for this. They complain
their pay is bad? It is a normal salary paid for the kind of job (cleaning)
that usually has to rely on the black market or extremely temporary gigs.
Although the situation is pretty bad, they have managed it well.

~~~
randycupertino
> It is a normal salary paid for the kind of job (cleaning) that usually has
> to rely on the black market or extremely temporary gigs.

Many cleaning workers are actually unionized, the SEIU is a large union of
service workers with contracts for hospitals, large office complexes, prisons,
schools, etc.

------
corporateslave5
SoftBank and their investors deserve this. SoftBank wanted to take wework and
jam it on the stock market, then pull their money out. They knew this company
was trash, they are no better than Adam Neumann. Congrats to Adam for exposing
and exploiting softbanks attempts to exploit the USA stock market. In the end
this will stop future cases of investors trying to jam garbage companies into
the public markets, essentially stealing money from retail investors who don’t
know better

~~~
arcticbull
There are no good guys here.

Neumann, by taking money from SoftBank, was completely complicit. He knew his
financials, he knew the company was a flaming dumpster, he knew he had no plan
to fix it, other than _buying a wave pool company_ and assigning his family to
high-level positions.

You really think if the company had gone public, Neumann would have what,
stepped up and said "see, this is why we need to add more investor
protections"?

~~~
rolltiide
He didn't need plans to fix it, Softbank got all the information they needed
for their due diligence and invested.

There are plenty of private companies with outside capital that are not
structured for a stock market debut. WeWork was one of them and the investors
tried to list it on the stock markets anyway.

Neumann played the best cards available to him and cemented his consolidated
ownership, with a different share class becoming a mere conduit for payment,
and voter control allowing for unilateral signing off on contracts to himself
and his other entities.

------
dang
Related from yesterday:
[https://news.ycombinator.com/item?id=21595493](https://news.ycombinator.com/item?id=21595493)

------
sieabahlpark
Anyone who stayed after the IPO fell through is an idiot. What did you expect
to happen? The company is failing so apply elsewhere already

------
zelon88
The guy is getting $1.7bn.

That is gluttonous. To put that into perspective, if you took even just $100m
and divided it among the 1,000 workers laid off each one would get $100,000.

Yet they get nothing. And this one man gets $1.7bn from a company that isn't
even healthy enough to survive while nickle and diming janitors who get paid
$24k/year.

This is what late stage capitalism looks like.

~~~
codegeek
I am a Capitalist but I approve this message. There has to be a sense of
morality somewhere even when running a company. I truly believe that a company
can make great profits while taking care of its people. I also believe that it
is ok for the initial risk takers like founders/CEO to make a hell lot more
money BUT not by destroying other people's lives.

I don't think any private company should have any interference by the Govt.
BUT every founder/owner/CEO should think about their people first. Is this
even possible ? I really hope so. "Moral Capitalism" anyone ?

Disclaimer: I run a small private company of 12 of us and I struggle with this
everyday.

~~~
soulofmischief
> I don't think any private company should have any interference by the Govt.
> BUT every founder/owner/CEO should think about their people first.

This amounts to an _ideological_ viewpoint, however it doesn't map to reality.
If the government doesn't step in, the worst of the worst will sift up to the
top, and the most complacent will sift to the bottom. It's how things
naturally fall into place.

Exploitative people in an unchecked market have an unmatched advantage. If you
believe in real market competition, then pure capitalism cannot work because
it stifles competition by creating unfair disadvantages for CEOs who think
about their people, discouraging them from acting benevolently.

The problem is that you see the government as this authoritarian beast who
must be kept in a cage for the safety of its people, when in reality a healthy
government _is its people_. Government regulations in a free market are a
result of the consumers who participate in the market wanting protection.

In the end, you either favor consumer protection or corporate protection.
Which seems more moral to you?

~~~
flavmartins
> consumer protection or corporate protection

Pick one. Couldn't have said it better. This is what people ALWAYS have to
remember. And as a reminder, the corporation will always take care of the
corporation.

~~~
codegeek
I think it depends on the size and nature of the corporation. For a small
bootstrapped private company (I run one), I always think about taking care of
employees along with making a profit. For us, customers come second because I
have the freedom to decide that (no outside board/investors to answer to). So
I would say it depends. Corporation is not just about taking care of the
corporation. There can be a middle ground even though I agree that a
corporation is not a charity and the goal is obviously to make money. I
personally don't believe in "Profits over people" even though I have the
freedom to believe and act accordingly. perhaps once you get VC funding and
the hockey stick growth pressure, all that goes outta the window ?

------
pastor_elm
A company that hires somebody 'at-will' has no obligation to keep them
employed forever. Employees at places like WeWork, which are transparent with
their unsustainable nature, should understand that and act appropriately. IMO,
it's a detriment to worker's rights to believe in this sense of Big Brother
Capitalist altruism.

~~~
rexpop
"obligation" is an interesting word to use, though I agree that naïveté is
detrimental to one's capacity to advocate for less-precarious working
conditions.

------
bpodgursky
Adam Neumann jacked $10B in funding from dumb, rich, foreign investors
(SoftBank). Over 80% of that money was pumped into salaries and domestic real-
estate deals.

Why are people mad about this? Dude is a modern Robin Hood -- a national hero.
Let him keep the $1.7B change.

~~~
Apocryphon
Robin Hood didn't keep the money he stole.

~~~
typeformer
Good rebuttal ^

