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WeWork set to axe 4,000 jobs

Job cuts are expected to affect WeWork’s global business - Bloomberg
Job cuts are expected to affect WeWork’s global business - Bloomberg

WeWork is preparing to axe at least 4,000 jobs with layoffs expected later this week as the office-space provider seeks to stem losses.

The cuts are expected to affect WeWork’s global business, which spans 123 cities, as the company faces the repercussions of a breakneck-growth strategy that has sent losses spiralling.

Up to 2,500 jobs could go at its core sub-letting division, while a further 1,000 employees may be sacked across its other ventures, The New York Times reported.

About 1,000 building maintenance workers may also lose their jobs as the company outsources their roles.

The sweeping cuts would amount to a third of WeWork’s workforce, and will form part of a wider, five-year plan to pare-back the firm’s spending.

The move comes as WeWork faces an inquiry from the Securities and Exchange Commission following the unravelling of its planned listing in September.

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The US regulator is preparing to scrutinise the firm to see if it broke the law by attempting to push ahead with a float that was widely criticised by investors. A $47bn (£36bn) valuation quickly plummeted to less than $10bn amid fears around haemorrhaging losses.

SoftBank, the office space start-up’s biggest backer, piled pressure on the company to shelve its listing amid concerns about the company’s labyrinthine corporate structure and the control exercised by Adam Neumann, WeWork’s ousted chairman and chief executive.

The Japanese technology conglomerate has since offered WeWork a $9bn lifeline as it faced the prospect of running out of cash. The company was due to receive a $6bn credit line from a string of banks upon the completion of an initial public offering.

Last week the company told investors that it has lost $1.3bn in the last three months. Earlier this month, WeWork issued a formal notice to staff at its UK operation of incoming redundancies, where it employs more than 1,000 people.

The notice is part of a wider move affecting WeWork’s Europe, Middle East and Africa (EMEA) business, which is headquartered in London.

According to account filings, WeWork International, the company’s UK subsidiary, saw losses balloon to £75.9m in 2018, up from £7.6m the previous year.