WeWork Reportedly Can’t Afford to Lay Off Employees

It's a bit of a broke-if-they-do-broke-if-they-don't situation

wework
About 2,000 WeWork employees are having a way worse day than you.
Raymond Boyd/Getty Images

No matter how bad this Tuesday is going, just remember that you could be a WeWork employee whose layoff got postponed because, while the company sure as hell can’t afford to keep you, they also can’t afford to pay you severance.

Yep, WeWork, which has been in relative turmoil since August, has found itself in a bit of a tricky situation. Bleeding money since a failed initial public offering, the company was planning on doing what any company would in that situation: lay off thousands of employees. Unfortunately, it turns out WeWork is actually too broke to even do that, the Wall Street Journal reported Monday.

As a result, WeWork has reportedly postponed the layoffs. However, that doesn’t necessarily mean the to-be-laid-off employees are off the hook. On Tuesday, WeWork announced SoftBank would be taking control of the company, likely providing enough cashflow to carry out those layoffs.

WeWork chose the SoftBank bailout over a competing offer from J.P. Morgan, the WSJ reported. The deal is reportedly expected to value the company at $8 million, a dramatic decline from its anticipated valuation ahead of WeWork’s infamously failed IPO just a few months ago. The deal will also sever most of former WeWork CEO Adam Neumann’s ties to the company. Neumann, who stepped down as CEO under pressure in September, is expected to also step down from the board, though he will reportedly maintain a stake in the company and remain a board observer.

The deal will hand Neumann about $1.7 billion, meaning the WeWork cofounder who once dreamed of becoming the world’s first trillionaire will exit the company, as Bloomberg put it, “barely a billionaire.” Somehow I think he’ll be okay.

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