RESEARCH TRIANGLE PARK – SoftBank shares continued to slide Thursday after the company announced its massive WeWork bailout. And WeWork staff is bracing for layoffs – perhaps several thousand. In the Triangle, however, WeWork won’t comment about any job cuts.
A spokesperson for WeWork declined comment about layoffs.
WeWork has a large presence in the Triangle area and an operation in Charlotte, offering shared working spaces and related services.
Media reports focused on the looming job cuts from a workforce of some 15,000.
“According to audio Recode obtained of a meeting at WeWork’s New York headquarters, the company’s new chairman, Marcelo Claure, said that layoffs will happen to ‘right-size the business,'” the business news site reports.
“He did not, however, offer further details about the cuts.”
The Financial Times, meanwhile, reported that WeWork plans to cut 4,000 jobs.
“Yes, there will be lay-offs–I don’t know how many–and yes, we have to right-size the business to achieve positive free cash flow and profitability,” Claure wrote in a memo that was obtained by The Financial Times.
Business Insider, citing a report from the Wall Street Journal, said “thousands of people are slated to lose jobs but that the decision had been delayed because WeWork has only ‘weeks’ of money left and can’t afford to pay severance.”
The takeover deal will give SoftBank up to 80% ownership of the beleagured startup. The Japanese company is pumping $5 billion into The We Company and accelerating a $1.5 billion equity investment originally due next year. It’s also offering to buy up to $3 billion worth of stock from existing investors and shareholders.
WeWork accepted the deal Tuesday in a story first reported by the Journal.
The agreement would hand co-founder Adam Neumann nearly $2 billion in exchange for severing most of his ties to the office-sharing company
SoftBank will pump $5 billion into The We Company and accelerate a $1.5 billion equity investment originally due to the company next year. SoftBank, already WeWork’s largest investor, is also offering to buy up to $3 billion worth of stock from existing investors and shareholders. The Japanese tech company will take ownership of about 80% of WeWork.
SoftBank shares slid more than 2 percent Wednesday.