WeWork Could Leave Thousands Without Jobs

Co-working space startup WeWork could lay off more than one-third of its total workforce as soon as next week, the New York Times reported on Sunday.

What Happened

More than 2,000 people employed in WeWork’s core business of subletting working space will lose their jobs, according to the New York Times.

Another 1,000 employees will be laid off as the startup shuts down its other businesses, including a private school it runs in Manhattan.

WeWork will also transfer another 1,000 employees working in building maintenance to an independent contractor, the publication said.

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Why It Matters

The massive layoff comes at a time when WeWork is facing larger than ever drop in profits. The company posted a net loss of $1.25 billion in the third quarter this year.

Tokyo-based investment firm SoftBank Group Corporation (OTC: SFTBY) acquired an 80% controlling stake in the startup in October.

Before the acquisition, WeWork was planning to cut as many as 2,000 jobs, The Guardian reported in October. Now, the number might be twice as big according to The New York Times report.

WeWork also faces a lawsuit from a former employee who alleged was discriminated on the basis of gender and pregnancy by the company’s former CEO, Adam Neumann.