In WeWork’s first all-hands meeting since Adam Neumann was ousted as CEO, company executives sought to reassure employees about the strength of the firm’s business model, but made clear that layoffs were coming.
Miguel McKelvey, who co-founded WeWork with Neumann in 2010 and now holds the title of chief culture officer, kicked things off by telling employees the company’s recent stumbles shocked him, according to sources who attended. He reminded workers of the company’s core values — the ones detailed throughout its S-1 filing — before turning the floor over to WeWork’s newly minted co-CEOs.
The company’s latest funding round in January, led by SoftBank, valued it at $47 billion and made it one of the country’s most valuable startups. Its rapid growth has made it the largest private tenant in prime markets such as Manhattan and Central London. However, on the road to its IPO, that valuation was heavily scrutinized, as was Neumann’s controversial behavior and his potential financial conflicts of interest. The company has seen its reported valuation plunge at least two-thirds since then. Neumann stepped down as CEO late last month and on Monday We pulled its application to go public.
Co-CEOs Sebastian Gunningham and Artie Minson, who until last week were vice president and CFO, respectively, reassured employees that the company’s business model was sound. Yet they made clear that job cuts were coming, noting that all departments were being “evaluated.”
Executives apologized for not informing employees of changes at the company in advance — many heard about the executive shakeups and other overhauls through the media — and said that now that the We Company had withdrawn its application for a public offering, communication would be streamlined.
Bloomberg first reported some details of the meeting Thursday evening.
WeWork has already cut ties with 20 of Neumann’s inner circle, including his wife Rebekah Neumann, who joined the company years after its founding but was billed as a co-founder and took on an increasingly prominent role until recently. WeWork also let go of its “Made by We” staff. On Thursday, hours after the company meeting, Business Insider reported WeWork might lay off between 10 percent and 25 percent of its roughly 12,500-person staff. Others have predicted that the layoffs could be far broader.
The all-hands meeting was held Thursday afternoon at WeWork’s Chelsea headquarters on West 18th Street and broadcast to the entire company. WeWork declined to comment.
WeWork has taken some unusual cost-cutting measures. At one location the company has for months been watering down mouthwash stocked in its bathrooms, according to an employee who works there. And to trim a roughly $4,000 per month budget on cold-brew coffee, the tap is now only open six hours a day.
David Jeans contributed reporting.