Bad week for WeWork employees...
Emailed on October 25th, 2019 in The Friday Forward
On Tuesday major WeWork backer SoftBank agreed to a $10+ billion bailout that gives Masayoshi 80% of the company.
Sources told CNBC without the bailout, WeWork would have been on track to run dry next week.
SoftBank had already sunk $10.6 billion in WeWork pre-bailout.
SoftBank will not treat WeWork as a subsidiary, so it won’t have to include WeWork’s massive losses on its balance sheet.
The deal reportedly involves co-founder and former CEO Adam Neumann walking away with about $1.7 billion, his voting shares, and his chairmanship.
WeWork employees reportedly weren’t thrilled about that, especially since many of them will be laid off.
Yesterday, newly minted executive chairman and SoftBank alum Marcelo Claure sent a company-wide memo relaying that layoffs were likely—the FT says as many as 4,000.
That’s about 30% of WeWork’s global workforce.
In other SoftBank news: Fair, a subscription-style service for car ownership, yesterday laid off 40% of its staff and replaced its CFO. This comes less than a year after SoftBank Vision Fund led a $386 million Series B round at a $1.2 billion post-money valuation.