WeWork’s problems aren’t over yet.
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Topline: WeWork’s troubles look far from over, with massive layoffs, a fiasco with its phone booths and a tough choice between two financial bailout plans as the company scrambles to raise cash and save its business.
- WeWork is expected to lay off at least 2,000 people—around 13% of its staff—as early as this week, the Guardian first reported.
- Employees described a “toxic” atmosphere, with little getting done at the company, and many staff expect further rounds of layoffs; WeWork declined to comment on the news.
- Executives at WeWork are weighing two financial rescue packages—one led by its biggest shareholder, SoftBank, and one led by JPMorgan Chase—as the company scrambles for cash following its failed IPO, according to the Wall Street Journal.
- While the first bailout proposal would effectively give control of the business to Masayoshi Son’s SoftBank, board members reportedly favor the second option, a multibillion-dollar debt financing plan led by JPMorgan.
- What’s more, WeWork is also removing 1,600 in-office phone booths from some of its U.S. and Canada locations, after tests came back positive for elevated levels of formaldehyde, according to a company email to tenants obtained by Forbes on Monday.
- WeWork is still opening new locations faster than ever, despite concerns about its cash-burn, CNBC reported; The company will completely run out of money by the second quarter of 2020 if its current trajectory doesn’t change, according to AllianceBernstein research.
Key background: The fiascos haven’t stopped for WeWork, which over the last month has imploded as it canceled its highly anticipated IPO and ousted CEO and founder Adam Neumann. The company’s new leadership has been selling off the company’s assets—including Neumann’s famed $60 million private jet—to cut costs and raise cash.
Tangent: WeWork’s founder and former CEO, Adam Neumann, lost his billionaire status as the company unraveled and he was sidelined, Forbes has reported. From a $4.1 billion net worth earlier this year, he is now down to no more than $600 million.