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

[rock217]

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

Re:A little confused by the summary

[OzPeter]

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

Re:A little confused by the summary

[elrous0]

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.

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

[serviscope_minor]

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.

Re:A little confused by the summary

[elrous0]

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.

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

[serviscope_minor]

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.

Re:A little confused by the summary

[retchdog]

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.

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.

Re:A little confused by the summary

[serviscope_minor]

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.

seems like a dangerous environment

[Gravis Zero]

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

Re:Startup? 16 billion dollars?!

[elrous0]

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.

It's more than that.

[luis_a_espinal]

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.

Fly By Night Incubators.

[Lumpy]

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.

Re:Fly By Night Incubators.

[tlhIngan]

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.

Re: Early

[XNormal]

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.