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World's Largest Shared-Workspace Startup WeWork Is Cutting About 7% of Staff (bloomberg.com)

Posted by msmash on from the life-at-booming-startup dept.

Ellen Huet, reporting for Bloomberg: WeWork Cos., the $16B startup, plans to cut about 7 percent of its staff and has instituted a temporary pause on hiring, according to e-mails obtained by Bloomberg. The cutbacks come just three months after the New York company said it raised a round of $430 million led by Chinese investors. Managers were instructed to begin dismissals this week, said one of the e-mails. The startup, which lets members rent desks in an open office, ballooned from about 230 employees early last year to more than 1,000 today, according to research firm Mattermark. WeWork said it hired 175 people in May and expects to add about 500 employees by the end of the year. The company said it expects to lift the pause on hiring as soon as next week.

51 comments

  1. Unicorns feeling the pinch?! by Anonymous Coward · · Score: 0

    How that economic recovery working out for ya now?

    1. Re:Unicorns feeling the pinch?! by Anonymous Coward · · Score: 0

      Considering I was buying while everyone was selling during the crash, quite well!

    2. Re:Unicorns feeling the pinch?! by Ol+Olsoc · · Score: 1

      How that economic recovery working out for ya now?

      Sounds more like cutting deadwood.

      --
      The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
  2. Early by Geoffrey.landis · · Score: 1

    That's early. You usually start downsizing only after a business starts up.

    --
    http://www.geoffreylandis.com
    1. Re: Early by XNormal · · Score: 2

      Startups are defined by rapid growth. It is probably too easy to get uncontrolled and inefficient growth, too. Remember this is not a software company that can support millions of end users per employee. They grow at startup rates with lots of real world locally managed locations.

      This is unfortunate but not really surprising.

      --
      Stop worrying about the risks of nuclear power and start worrying about the risks of not using nuclear power.
  3. A little confused by the summary by elrous0 · · Score: 3, Insightful

    which lets members rent desks in an open office

    Couldn't you just go to the library and get a desk and computer for free?

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
    1. Re:A little confused by the summary by rock217 · · Score: 3, Informative

      They also offer gigabit, conference rooms, free coffee and beer, etc.

      --
      Wah Sig!
    2. Re:A little confused by the summary by OzPeter · · Score: 2

      which lets members rent desks in an open office

      Couldn't you just go to the library and get a desk and computer for free?

      Even more so .. there are groups dedicated to giving away shared workspaces so that people can collaborate and form new ideas: Gangplank

      --
      I am Slashdot. Are you Slashdot as well?
    3. Re:A little confused by the summary by elrous0 · · Score: 3, Funny

      At $50 a day, I would have to drink a lot of beer for it to be considered "free." But hey, I'm up for a challenge.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    4. Re:A little confused by the summary by Mitreya · · Score: 4, Insightful

      Couldn't you just go to the library and get a desk and computer for free?

      Yes, you could, but that's not going to generate a $16B valuation out of thin air.
      A more interesting question is why do they need over 1000 employees.

    5. Re:A little confused by the summary by serviscope_minor · · Score: 3, Interesting

      Oh don't be silly.

      It's a co-working space. Going and getting a desk in a library is not suitable for about 99% of actual small businesses. Co working spaces provide you with the things you ACTUALLY need in an office, like a permanent desk, conference rooms, places to make phone calls without disturbing everyone, kitchenette facilities etc.

      You know, office things not a library.

      And running offices actually takes real people.

      --
      SJW n. One who posts facts.
    6. Re:A little confused by the summary by elrous0 · · Score: 2

      A multi-billion dollar valuation is easy to get in Silicon Valley these days. Just throw around a lot of hip buzzwords and phrases (like "open shared collaborative space" and "idea incubator") and VC's will throw money at you like a new stripper. And if you throw in some shit about being eco-friendly and "listening to the voice of the millenial generation" too, they'll just straight-up give you a cargo container filled with gold bars.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    7. Re:A little confused by the summary by ShanghaiBill · · Score: 0

      They also offer gigabit, conference rooms, free coffee and beer, etc.

      How many startups need gigabit? You need broadband to watch movies, but not for development. Normal Wifi is enough for cutting and pasting from Stackoverflow, and the library has that. For $50 a day each, you could team up with two other people and rent a three bedroom apartment (maybe not in Manhattan, but certainly in Brooklyn or Queens).

    8. Re:A little confused by the summary by elrous0 · · Score: 4, Insightful

      At about $1,000 per person/per month that had better be one bitching kitchenette.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    9. Re:A little confused by the summary by serviscope_minor · · Score: 5, Insightful

      Couldn't you just go to the library and get a desk and computer for free?

      No not really. Most businesses want a proper office to work out of, for a variety of good reasons. Small businesses are no different, but if you only have a few people, it's much cheaper to pool resources and rent only a desk or two while the less used but essential facilities (conference rooms, phone rooms, kitchen, showers, toilets, etc) are pooled.

      --
      SJW n. One who posts facts.
    10. Re:A little confused by the summary by serviscope_minor · · Score: 2

      450 GBP per month in London. It comes with nice facilities, free beer and coffee and stuff. You won't find a whole office to rent with lower per-employee costs than that in central London until you get a reasonable number of people.

      Personally, I'm choosing to go for the 300 pcm place which is a little shabbier (WeWork is very slick), but well, quite a lot cheaper. If I had to meet customers I'd pay to use WeWork instead.

      --
      SJW n. One who posts facts.
    11. Re:A little confused by the summary by Yesimbald · · Score: 1

      Couldn't you just go to the library and get a desk and computer for free?

      Usually rented desks have 24 hour access and no kids, teenagers or old fat lady hanging out.

    12. Re:A little confused by the summary by Anonymous Coward · · Score: 1

      Well, with my desk, if the old fat lady starts to hang out, I just stuff her back in the drawer.

    13. Re:A little confused by the summary by sribe · · Score: 1

      Do you have any clue at all what office space costs?

    14. Re:A little confused by the summary by Anonymous Coward · · Score: 0

      Couldn't you just go to the library and get a desk and computer for free?

      No not really. Most businesses want a proper office to work out of, for a variety of good reasons. Small businesses are no different, but if you only have a few people, it's much cheaper to pool resources and rent only a desk or two while the less used but essential facilities (conference rooms, phone rooms, kitchen, showers, toilets, etc) are pooled.

      Why not work from home with a conference type system (chat, voice, etc. as appropriate)? I would love working from home every day and never dealing with seeing the backstabbing SOBs plaguing the typical office.

    15. Re:A little confused by the summary by retchdog · · Score: 2

      the free beer is empty most of the time. it's only reliably refilled when they're showing the place to prospective business clients. (wework offers daily access to individuals as well as short-term quasi-leases to businesses.) the internet also tends to be shit, depending on capacity. it is better than panera bread, i guess, but mostly only because it's cleaner and doesn't have as many poors wandering around. the privacy booths are nice though.

      the conference rooms need to be booked and cost extra (though they're often left open and you can usually just use one until someone with a reserved time comes in). oh, and since they're trying to pack as many people in as possible to maximize profit, you end up sharing a two-stall bathroom with 100+ people.

      my company had their office in one for a while. it was a mixed bag even for the employees (who weren't paying the inflated lease charges). the founders were thrilled to move out.

      --
      "They were pure niggers." – Noam Chomsky
    16. Re:A little confused by the summary by retchdog · · Score: 4, Insightful

      i guess you could, but you'd have a lease term of a year and will generally have to pay at least first+last+security upfront (with bad credit it will be either more, or just not available at any price). in the better areas of Brooklyn and Queens, that's going to be about $10,000 upfront; in the ass-end of nowhere, it's still at least $6,000. then again, you don't need a three-bedroom. even better, if you're savvy you can still independently rent bare-bones workspace for much, much less.

      the rational use of daily-term wework rentals is if you're in a city and professionally meeting with someone for a day, and want an office space to get your shit together and look at least semi-professional, rather than meeting a client in the hotel lounge or a starbucks. wework offers longer-term contracts for businesses. comparing the daily rate to a leased apartment is like saying you should buy a house instead of renting an apartment. it's solving a different problem.

      --
      "They were pure niggers." – Noam Chomsky
    17. Re:A little confused by the summary by Anonymous Coward · · Score: 1

      WeWork is generally located in prime real estate areas. There are lots of companies which need that location. For example, if you have a salesman in the SF territory, he can't work out of a home office in Walnut Creek. (And he can't take phone calls in a library or the other retarded locations suggested by other people here.) The closer he is to clients the more meetings he gets and the more deals he closes.

      $12,000/year is a very typical price per person in these real estate markets. If you don't need the location obviously you can save money by getting a space in a cheaper city. If you have a hundred employees obviously you can save money by renting a floor in a building and building out your own office.

    18. Re:A little confused by the summary by serviscope_minor · · Score: 2

      Why not work from home with a conference type system (chat, voice, etc. as appropriate)?

      Because if I work from home too much, I get cabin fever.

      I would love working from home every day and never dealing with seeing the backstabbing SOBs plaguing the typical office.

      They're all in different companies in a cow-orking space, so backstabbing really isn't a part of it. Besides if you've got to that state in a company small enough to be using such a space then you've messed up your company.

      --
      SJW n. One who posts facts.
    19. Re: A little confused by the summary by brunes69 · · Score: 1

      You have to remember that it is $50 directly deductible as a business expense, so it's really more like $30 a day.

    20. Re: A little confused by the summary by AmazingRuss · · Score: 1

      But you can't synergize your thoughtspace by babbling while people are trying to work at the library.

  4. What? by jbmartin6 · · Score: 1

    The first part mentions "plans to cut about 7 percent of its staff" but then the rest of the article talks about hiring starting next week. It makes it sound like the author is confused between a pause in increase and an actual cutback. I suppose they are firing some people and then hiring others.

    --
    This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
    1. Re:What? by elrous0 · · Score: 1

      It sounds more like a deep-cover slashvertisement to me. But at $50+ a day for a single desk with no computer provided, I imagine they need all the help they can get.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    2. Re:What? by Mitreya · · Score: 1

      deep-cover slashvertisement

      deep-cover?
      I think slashvertisements stopped being subtle a long time ago. Some are too much for an actual commercial ad.

    3. Re:What? by Anonymous Coward · · Score: 0

      The first part mentions "plans to cut about 7 percent of its staff" but then the rest of the article talks about hiring starting next week. I suppose they are firing some people and then hiring others.

      This has been common for years. Companies announce large layoffs while continuing to hire people.

    4. Re:What? by Anonymous Coward · · Score: 0

      Yup. Lay off workers, make numbers for that quarter, then hire new ones (usually younger, stupider/"less experienced" (in the ways of the work world), and possibly more foreign) shortly thereafter. Repeat as necessary until golden parachute kicks in.

  5. Startup? 16 billion dollars?! by Anonymous Coward · · Score: 0, Troll

    And all it does is rent desks?

    Unbelievable. I didn't think there were that many stupid people in the World.

    1. Re:Startup? 16 billion dollars?! by Anonymous Coward · · Score: 0

      And all it does is rent desks?

      Unbelievable. I didn't think there were that many stupid people in the World.

      You really didn't think Silicon Valley companies innovate these days ? These multibillion valued unicorn companies are for suckers. Their only goal is to scam 99% of investors leaving the 1% richer. And of course after the company goes public they aren't able to achieve anything of value at all. America exports scams.
      Real innovation requires long term investment and strategic thinking. You ain't gonna find this in Silicon Valley.

    2. Re:Startup? 16 billion dollars?! by elrous0 · · Score: 3, Interesting

      I saw an interview with Mike Judge recently where he said that he had originally intended Silicon Valley to be a parody of the real thing, but quickly discovered that the real thing is much more bizarre and insane than he had imagined even in his comic fictional universe. The biggest criticism he said he got from real "angels" and VC's was that it wasn't realistic that these characters even had to work at all to get funding. In real life, Silicon Valley investors would be pushing each other out of the way to throw money at them, just on the PROMISE of an idea.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    3. Re:Startup? 16 billion dollars?! by Anonymous Coward · · Score: 0

      Having worked in Silicon Valley for 20 years, much of it consulting with startups, I wish the statement above was true. It might be for some but in every case I've been involved with, it's taken months or years of planning, writing business plans, developing prototypes, pitching, revising, pitching, ad infinitum.

  6. seems like a dangerous environment by Gravis+Zero · · Score: 2

    obviously they have too much paper passed about if 7% of the staff is getting paper cuts. they should really move to a paperless workplace. #OnlyReadTheTitle

    --
    Anons need not reply. Questions end with a question mark.
  7. you know by Anonymous Coward · · Score: 0

    With bullshit company, comes bullshit responsibility

  8. Is it really the world's largest ? by Yesimbald · · Score: 1

    Looks like Regus have more location worlwide

    http://www.regus.com/business-...

  9. It's more than that. by luis_a_espinal · · Score: 3, Interesting

    which lets members rent desks in an open office

    Couldn't you just go to the library and get a desk and computer for free?

    It's more than that. You get dedicated network services, and in some cases, a business number with a receptionist/secretary, PO boxes, etc. You can have a business presence on-demand, or a-la carte. This is more important when you have to meet with customers. You can book conference rooms, pay-as-you-go, to meet your customers while doing most of your work from home, let's say.

    It is a balance. For some people it might be better just to lease an office. For others, shared workspace might be the way to go. It's all a matter of your specific accounting and cash flows needs.

  10. New company name by Anonymous Coward · · Score: 0

    WeLookForNextGreatOpportunity

  11. Fly By Night Incubators. by Lumpy · · Score: 2

    We have a couple of these places in my city and EVERY SINGLE "business" that is based in them is typically a single person that is trying to make the clients think he/she is bigger than he really is. Once the address is realized as to what it is, the effect wears off and then all the businesses in town starts dogging on it.

    Sorry but if all your business exists in a 13 inch laptop you carry in your backpack and you go and rent a random desk, I'm not going to trust you to be able to do the job.

    --
    Do not look at laser with remaining good eye.
    1. Re:Fly By Night Incubators. by Anonymous Coward · · Score: 1

      Ok, bud. These places are very valuable for remote offices which are very common at real companies. E.g. Company X has a headquarters in SF with 200 people, but they need to sell to clients in Chicago, NY and LA. They use WeWork or Regis to station a couple salesmen in each of those cities. They're not going to lease an actual office for god knows how much money just for 1-3 salesmen. Alternatively, they have an engineer working away from the main office. Could be that he was the best guy they could find and he lives in Denver or maybe one of their people decided to move (cost of housing, spouse got a transfer) and this is a better alternative to a home office because he can stay focused without his kid bugging him every 20 minutes and it gives him facilities like scanners and printers.

    2. Re:Fly By Night Incubators. by tlhIngan · · Score: 2

      We have a couple of these places in my city and EVERY SINGLE "business" that is based in them is typically a single person that is trying to make the clients think he/she is bigger than he really is. Once the address is realized as to what it is, the effect wears off and then all the businesses in town starts dogging on it.

      Sorry but if all your business exists in a 13 inch laptop you carry in your backpack and you go and rent a random desk, I'm not going to trust you to be able to do the job.

      And yet, you probably do a lot of business with people like that all over the internet. It's just that you don't know that they're small one-person businesses. A lot hide out behind sites like Amazon and eBay, and take credit cards direct or through Paypal as well.

      So you won't trust a single person in person, but you will trust them sight unseen? '

      The only reason they use these places is because if they didn't, they'd have to meet inside a residential house. Are you going to be happier in that case?

      The internet is more often than one one-person operations done out of someone's home. Co-working spaces simply allow people to do face-to-face meetings if for some reason the client won't let the other person onto their premises (perhaps they TOO are a one-man business working inside their house).

      And yeah, maybe you won't trust them with a $1,000,000 contract, fair enough, but if you're asking them to do a $10,000 website design, well, perhaps at this point the only people you can hire are one-man businesses for that price.

      And if they're smart, the laptop is just so they can work on stuff while waiting for you, the real backups and servers are hosted elsewhere so even if the laptop is stolen, the work isn't lost.

    3. Re:Fly By Night Incubators. by Anonymous Coward · · Score: 0

      Fair enough. Now tell me, how is a company whose business plan is to lend furniture worth 16 billion dollars.
      Seriously there just is a galactic disconnect between the real value of a company (and yes lending furniture to other companies might be a worthwile endeavour) and a pie in the sky 16 fucking billion dollars evaluation. For what exactly ? For me it simply spells S-C-A-M.

    4. Re:Fly By Night Incubators. by Anonymous Coward · · Score: 0

      I dunno about you, but typically I trust a company more if it has less employees.

      Large companies tend to be capitalist-scum tier companies that abuse tax loopholes out the ass, have awful perks for employees, if even any, and pay minimum wage, or were FORCED to pay minimum wage.
      Tiny cubicles if they have them. Awful rest periods. And so on.

      There are plenty of one-person companies out there that are perfectly fine. Particularly on online-reseller sites.
      People making some unique one-off clothes, or art, or music, writers, etc.

  12. First ugly reality by Futurepower(R) · · Score: 1

    Wow. To know the Regus prices you must agree to a contract.

    1. Re:First ugly reality by Anonymous Coward · · Score: 0

      Contract? You mean their T&Cs? It is basically a 1-page list of agreeing to them marketing to you through the various contact details you provide to them, with them agreeing that they will provide a way for you to opt-out. Annoying perhaps, but hardly onerous.

  13. Shared office environment by Anonymous Coward · · Score: 1

    Fuck office, fuck window, fuck shared, fuck we, fuck cold brew coffee, and FUCK YOU!!!!!

  14. It's getting to where there are no more new ideas? by TigerPlish · · Score: 1

    Is this it? Have we hit Peak Capitalism?

    --
    The "Civilized World" jumped the shark ca. 1973.
  15. Valuing a corporation by radarskiy · · Score: 1

    Someone gave them $430 million in exchange for ownership of 2.5% of the company. Therefore, they can claim that 100% of the company is worth 40 times that amount.

  16. Worse than "onerous"! by Futurepower(R) · · Score: 1

    "... hardly onerous."

    If you want to see the contract, go to ZIP Code 10007 and click on a location. Then, in the lower right-hand corner of the pop-up box, download the contract.

    If I just want to know some prices, I don't want to get on their telephone call list!!!

    Some of the terms of the contract:

    "You agree to receive telephone calls from Regus at the telephone number you provide to Regus, even if you have registered this number on a Do-Not-Call list."

    "You agree to receive telephone calls from Regus for the purpose of marketing and answering questions you have about Regus' products and services."

    "You expressly agree to receive communications from Regus at the telephone number you provide that advertise Regus' products and services and which may be placed by an automatic telephone number dialing system."

    I consider those terms and others to be EXTREMELY unpleasant. They show a lack of social sophistication of Regus management. Immediately we know that Regus is a VERY badly managed company, IMO. It is likely that customers will experience MANY other very unpleasant management failures.