Startups

WeWork To Reportedly Lay Off Up To 4,000 Employees

WeWork is planning on laying off up to 4,000 employees following its funding rescue by SoftBank, according to the Financial Times.

The company employs about 15,000 people, according to Vox. WeWork is also planning on prioritizing its operating in the United States, European and Japanese markets, while scaling back in China, India and Latin America, FT reported.

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The planned cuts and possible building closures come on the heels of turmoil at the company.

On Tuesday, WeWork announced that Softbank would take control of the company, giving it $5 billion in new financing, a tender offer of up to $3 billion for existing shareholders and speeding up an existing commitment to fund $1.5 billion for WeWork. SoftBank will have an 80 percent stake in WeWork.

Meanwhile, SoftBank is paying former CEO Adam Neumann $1.7 billion to leave. Specifically, SoftBank is paying him up to $970 million for his shares, a $185 million consulting fee and $500 million in credit, according to CNBC.

WeWork did not immediately respond to a request for comment.

New WeWork executive chairman Marcelo Claure wrote in a memo to employees that there would be layoffs but did not specify how many positions would be cut, according to the Financial Times.

“Yes, there will be lay-offs–I don’t know how many–and yes, we have to right-size the business to achieve positive free cash flow and profitability,” Claure wrote in the memo obtained by FT.

An earlier report from the Wall Street Journal said WeWork delayed layoffs because it didn’t have the cash on hand to pay employees’ severances.

The layoffs cap off a turbulent time at WeWork–a botched IPO, a slashed valuation, an executive departure, and being on the brink of bankruptcy. You can read more about the timeline of WeWork’s woes here.

What’s next for WeWork isn’t clear. The company unraveled so fast that it’s been hard to keep up. Stay tuned for more coverage.

Illustration: Dom Guzman

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