WeWork is preparing to cut at least 4,000 jobs in a bid to achieve financial stability and those layoffs could be announced as early as this week, The New York Times reported late Sunday.
The start-up could lay off 2,000 to 2,500 employees in its main office-space renting business, two people with knowledge of the matter told the Times. Another 1,000 staff are expected to leave as WeWork sells or shuts down noncore businesses such as a private school in Manhattan, New York, while another 1,000 building maintenance employees would be transferred to an external contractor, according to the Times.
As many as 6,000 employees could ultimately be laid off, one person told the Times.
WeWork declined to comment when contacted by CNBC.
Last week, WeWork told investors it lost $1.25 billion on revenue of $934 million in the third quarter — losses were up more than 150% from the same period a year ago.
Following its rapid global expansion, including into cities with sky-high rent, WeWork faced a tumultuous few months: In September, it withdrew plans to go public and CEO Adam Neumann was replaced after attracting scrutiny from investors. In October, the start-up received a $5 billion rescue package from SoftBank, through which the Japanese conglomerate took 80% ownership of WeWork. Without the deal, WeWork would have run out of cash by the end of October, CNBC previously reported.
Previous reports have said layoffs were expected as part of WeWork’s attempts to turn its fortunes through painful cost-cutting measures.
WeWork rents out office spaces to start-ups, freelancers and enterprises by investing in real estate in some of the most expensive markets around the world. It makes money back over time as companies and individuals pay their rent or membership fees.