Hours after published reports embracing the shared workspace company WeWork is about to lay off 4,000 employees, the company is located in the cross chairs in the state of New York.
According to Reuters, New York Attorney General Letitia James has started an investigation into the company. "We received an inquiry from the office of the New York State Attorney and are working on the case," a spokeswoman for WeWork said.
Although details of the investigation are not entirely clear, Softbank-backed companies have faced serious concerns in recent months about the sustainability of their business model, which relies on a mix of long-term obligations and short-term revenues.
It also faced criticism of its governance standard when founder Adam Neumann had a full 20 times the voting rights of ordinary shareholders before his departure as the company's CEO in September. Neumann, who negotiated a payout of nearly $ 2 billion as part of the outing, will continue to join the company as an advisory role.
THE WORK HAS BEEN FOR T-MOBILS CEO for a new role
Still, that assembly vote led to WeWork submitting, and eventually scrapping, the plans to go public. This was followed by a financial rescue package from Softbank that caused the company's valuation to fall by nearly $ 40 billion, from $ 47 billion to just $ 8 billion.
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Last week, WeWork reached out to T-Mobile leader John Legere to review leadership of the company as soon as January, but Doctors have declined the offer.
Meanwhile, the drum beat for pending layoffs is getting louder. According to an email from The Washington Post, WeWork CEO Marcelo Claure said the layoffs would begin this week and were needed to create a "more efficient, more focused and even more customer-centric organization."
The New York Times reported that 1
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