WeWork, the once-valued $ 47 billion business, is expected to announce significant layoffs this month, according to reports the company was looking to cut as many as 5,000 roles, or one-third of its workforce, Bloomberg reports .
Now expected to go public in 2020 at a valuation as low as $ 10 billion, WeWork is also in talks with JPMorgan at a last-minute cash infusion to replace the capital expected from the now delayed IPO, per reports. The company, which is now a warning, has been working with bankers in recent weeks to reduce the soaring costs of its money-losing business.
News of potential layoffs comes about two weeks after co-founder and CEO Adam Neumann resigned from his position and exposed the nine-year-old company to the much-awaited public offering. Neumann now serves as the company's non-executive chairman, followed by WeWork's former deputy chairman Sebastian Gunningham and the company's president and CEO Artie Minson.
The embattled company has struggled to satisfy Wall Street skeptics, who were floored by the company's eye-catching appreciation. Since Neumann's resignation, WeWork has embarked on several cost-saving measures and is reportedly looking to sell several of its acquisitions, including Managed by Q, Conductor and Meetup.
Resignation is a natural next step for the business as it aims to carve out a clear path to profitability, now a prerequisite for a stock exchange listing in 2020. To float at any time in the future, after all, you must WeWork prove that raising "the world's consciousness" will eventually lead to profits.
WeWork revealed an unusual IPO prospectus in August after collecting more than $ 8 billion in equity and debt financing. Despite finances showing nearly $ 1
"As co-founder of WeWork, I am so proud of this team and the incredible company that we have built over the last decade," Neumann said in a statement confirming his departure. “Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members every day. Although our business has never been stronger, the control directed at me has become a considerable distraction, and I have decided that it is in the company's best interest to retire as CEO. Thank you to my colleagues, our members, our landlord partners and our investors for continuing to believe in this wonderful business. ”
We have reached out to WeWork for comment.