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Home / Business / WeWork reportedly delayed layoffs because there is little cash

WeWork reportedly delayed layoffs because there is little cash



  • WeWork has delayed layoffs of thousands of workers because it does not have enough cash to pay compensation, The Wall Street Journal reported Monday.
  • The company could reportedly run out of cash within the next month unless new funding becomes available, and had plans to cut jobs to save money.
  • How the company will handle severance pay has been a hot topic of discussion, and employees are particularly concerned about the WeWork shares they own.
  • WeWorks Board expected to review funding offers from SoftBank and JPMorgan on Tuesday.
  • Read full Business Insiders WeWork coverage here.

WeWork, it seems, is in a bit of a catch 22.

With money running shortly after a failed public offering, WeWork has planned to lay off thousands of employees. There's only one problem ̵

1; it's so short of cash that it doesn't have enough money to pay severance pay to affected workers, according to The Wall Street Journal's Liz Hoffman and Maureen Farrell.

So WeWork, which reportedly will run out of cash within a month if it does not receive a new financing agreement, has postponed the layoffs, The Journal reported on Monday.

A WeWork representative did not respond to an email seeking comment.

The delay can be short term. WeWork's Board of Directors is expected to meet on Tuesday to consider new financing offers from SoftBank and JPMorgan. Both deals will increase the wear and tear company with billions of new dollars in extra cash.

WeWork's new co-CEOs told employees in an email last week that the company planned to lay off workers in the coming weeks.

Read this: WeWork CEOs say that layoffs to staff come in leaked email ahead of the rescue package decision

As reports of impending layoffs have swirled, end packages have been a hot topic of conversation in We work. Employees have been peering at management with questions about it recently, focusing especially on what will happen to their outstanding shares in the company, a person familiar with the case told Business Insider. Employees have also asked if their fee package will take into account any stock they owe.

Many employees were partially paid in shares. Others received WeWork shares when the company bought a startup. In many cases, the shares they received received a much higher value than they do now.

SoftBank valued WeWork for $ 47 billion in a funding round in January. Bailouts suggested by it and JPMorgan would place the company's value at $ 8 billion or less.

Do you have a tip about WeWork or another company? Contact this reporter by email at twolverton@businessinsider.com, message him on Twitter @troywolv or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.


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