WeWork has published a detailed plan to divest itself of non-core businesses and implement internal layoffs. The divestitures and layoffs are part of a 90-day plan to turn the company around. The presentation of the plan was first shared privately with investors in October.
According to the plan, the office-sharing company will divest from a number of its non-core businesses. The company plans to sell Meetup, the online community event organizer that WeWork bought in 2017, as well as its stake in women’s co-working company The Wing. It also plans to sell its stakes in Spanish wave-pool startup Wavegarden and Teem, which makes conference room booking technology. Its stakes in digital marketing platform Conductor, Managed by Q, which makes software to help office teams hire service providers, and Space IQ, which makes software that helps companies manage physical workspaces are also up for grabs.
WeWork said the unspecified number of job cuts will target administrative employees, those working in growth-related positions and those at ventures the company expects to scale back. “Community teams” based within its shared office sites will not be impacted by the layoffs. This week, a group calling themselves the WeWorkers Coalition sent an open letter to company management demanding more transparency and accountability from the company and to be part of decision-making at the company.
The company will now turn its focus to its core business of selling shared office space. In the third quarter of 2019, WeWork added 108,000 desks at newly built shared offices. The addition resulted in a slight dip in its average occupancy rate, to 80 percent from 83 percent in the previous quarter. WeWork now has 580,000 members in 600 locations across 122 cities in 32 countries.
Earlier this week, a proposed class action was filed in San Francisco Superior Court by former WeWork employee Natalie Sojka over the company’s failed IPO attempt. WeWork’s planned IPO collapsed after investors balked at losses that grew to nearly $2 billion year and at the company’s business model, which offered no clear path to profitability. The suit seeks to recoup losses from the defendants’ actions, which caused a big drop in the stock’s value. Estimates of WeWork’s valuation have fallen to as little as $5.9 billion from $47 billion in August.