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

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.

Comments

A little confused by the summary

[elrous0]

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?

Re:A little confused by the summary

[Mitreya]

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.

Re:A little confused by the summary

[elrous0]

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

Re:A little confused by the summary

[serviscope_minor]

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.

Re:A little confused by the summary

[retchdog]

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.