WeWork axes another 250 jobs in its attempt to lower cost after its failed initial public offering last year. As reported by Bloomberg, the New York-based co-working company took this decision in its development department on Thursday.
The reductions aren’t related to the impact of the coronavirus, one of the people said. It is in fact part of its plan to undergo major restructuring. As WeWork continues to execute its new strategic plan, it realigns certain functions and teams to reflect their business priorities.
Employees affected by the cuts have received the same severance package offered to the 2,400 WeWork staff who had their jobs eliminated in November. It entails four months of salary and benefits, or six months for employees who had been with the company for more than four years.
Reportedly, WeWork had also cut dozens more jobs in February. WeWork still faces a rough road ahead as the global pandemic is likely to make its members, more than a quarter of which were on month-to-month leases last year, hesitant to renew contracts or likely to default if they have lost income.
The company also is facing a public battle with its majority owner SoftBank Group Corp. as the investor threatened last week to unravel part of a $3 billion deal to buy back shares from investors and employees. Would there be more job cuts going forward? The COVID-19 outbreak and the subsequent lockdown in major cities will surely affect its business negatively for a few months. The pandemic could add onto WeWork's problems and urge them to take more difficult decisions.