Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily operations of a workspace). That STILL means >10 workers per location full time.
No wonder the financials don't add up.
IWG plc which is their major competitor has 9,000 people so I'm not sure it's that crazy. Might explain why they want to trim 25% also!
IWG has a lot of franchised sites, but so does WeWork, as far as I know China + India are franchise operations or something similar.
(Remember, excluding cleaning staff)
1 - https://www.npr.org/2018/08/31/643774290/wework-miguel-mckel...
Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.
Couldn't resist fixing that for you. The little pun (homonym?) has some explanatory power for the company's current position.
The wewtf link someone else posted is good, but essentially, it was burning through cash in order to grow. Its private investors (mostly Softbank) were OK with that, but the public markets weren't. They also didn't like management and corporate structure). Not being able to raise cash to continue hypergrowth and having faced a reckoning about the true business prospects and valuation, they have to cut back.
> ...focus on our core business, the fundamentals of which remain strong
I actually buy this line. At the end of the day, they're getting money for a product, so there's a business there. The main risk with We is that there's a recession, occupancy drops to 50%, and they're stuck with the leases. But that's not a unique risk.
What is unique is how massively overexposed they are to this risk.
That is just obscene.
Neumann does come away as a bit over the top:
> “I rarely give away my power, and when I do, it’s to my wife,” who he said was “99 percent right,” according to multiple people who watched the speech. Neumann concluded with yet another moment of life coaching: “Change your inner self. Change the world.”
> "The S-1 detailed the extent to which Neumann controlled his company, and had benefited personally from his position: he had bought buildings in which WeWork then took out leases, and received $5.9 million in exchange for selling a set of We-related trademarks to his own company. One clause called for Rebekah to name a successor in the event of Adam’s death. The entire thing was dedicated, in an epigram, “to the energy of We — greater than any one of us but inside each of us.”"
Let's say there's only 10% of employees or some very low number. Would then the Real Estate deals put in place vs. the Revenue received for re-leasing them pencil out positive?
Nah, I'd say leadership is clearly at fault. Layoffs are pretty much always failures of leadership.
Why?
