WeWork said Thursday it is laying off about 2,400 employees globally as part of a broader effort to cut costs and find a viable path forward after a disastrous IPO attempt.
“As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organization,” a WeWork spokesperson said in a statement provided to CNN Business. “The process began weeks ago in regions around the world and continued this week in the U.S.”
The company added: “This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition. These are incredibly talented professionals and we are grateful for the important roles they have played in building WeWork over the last decade.”
The company – which branched into co-living buildings, a gym and a school in recent years – had ballooned to more than 12,000 global employees.
The layoffs have so far impacted departments across the company, including WeWork’s human resources, growth, and corporate technology departments, according to one source. The company declined to comment on this.
This total doesn’t include the roughly 1,000 cleaners and building maintenance staffers who were told their jobs will be outsourced and were given the opportunity to accept new jobs at real estate services company JLL, one of the outsourcing partners, or be involuntarily terminated from their job at WeWork with no severance.
The specter of sweeping layoffs has hung over the company for much of the past two months since it failed to pull off an IPO. During that time, WeWork’s cofounder and CEO Adam Neumann was forced to step down and the company accepted a multibillion-dollar bailout from SoftBank. As part of that deal, Neumann received a massive payout despite all but running the company into the ground.
In an email sent to staff Monday and obtained by CNN Business, WeWork executive chairman Marcelo Claure did not specify how many people will be laid off but said that “the necessary job eliminations” will “start in earnest this week in the U.S.”
The company had yet to publicly put a number on how many people would be laid off. Multiple reports in recent weeks have said WeWork could cut 4,000 jobs, if not more, with The New York Times reporting that many of those positions are part of its core coworking business.
Leading up to the layoffs, leadership had attempted to ease concerns about the cuts by promising to prioritize treating those laid off with “dignity and respect,” as Claure said in a separate company-wide email. He emphasized that WeWork’s business is secure.
The unfolding saga highlights the risk of working for a high-flying tech startup. While some employees once saw their paper wealth soar as WeWork’s valuation rose as high as $47 billion on the private market, WeWork’s valuation has since plummeted to a fraction of that. WeWork reportedly delayed laying off staffers because it couldn’t afford to pay severance, prior to accepting the SoftBank bailout.