WeWork is systematically removing the flamboyant coat outside the property.
WeWork’s listing path has been met with twists and turns, and it is forced to leave the company not only founder and CEO Adam Neumann.
WeWork, which has always advertised itself as a technology company, has abolished 500 people from a technical team of 1,500 people. Among them, 350 positions will be cut from the software engineering, product management and data science teams, and another 150 positions will be abolished because the company wants to sell some assets, including Managed by Q (office management platform), Teem (office) Collaboration software), SpaceIQ (workspace management and operation platform), Conductor (digital marketing service provider), etc. These are the technology companies that WeWork acquired in the past few years.
WeWork has expanded its technical team over the past few years and has acquired a number of technology companies. At the same time, the company’s increasingly high valuations are endlessly questioned by the outside world around high valuations.
For WeWork, emphasizing the use of big data and artificial intelligence can differentiate itself from traditional real estate leasing companies, gaining higher valuations and more investment from investors. Since its inception in 2011, the company has raised $12 billion in funds, some of which were used to lease real estate, and some were used to create “technical family buckets”.
This approach has never been seen before, and Wall Street analysts have long questioned this. Some analysts believe that WeWork only wraps the core of a traditional leased property with a technology skin, and the $47 billion valuation is too high for it. Moreover, its profitability has never been confirmed.
The failure of the two IPOs of Uber and Lyft this year proves that investors have not been so patient with this blueprint but shy. WeWork can no longer be listed so rashly. With the departure of the founder, WeWork is systematically fading away from the flamboyant coat outside the property.
In September, The Information reported that WeWork executives are discussing a layoff plan of up to 5,000 people, accounting for one-third of their total workforce. In addition, they also plan to slow down the expansion plan and close the sideline related to education or housing, according to people familiar with the matter. This month, the same media reported that the final layoff plan may involve 2,000 people.
Of course, the valuation will not be so high. In September, Reuters quoted an anonymous source as saying that WeWork’s valuation in the IPO has been as low as $15 billion. The company has now announced a postponement of the listing and said it plans to complete the listing “before the end of the year”.
The prospectus shows that as of the beginning of this year, WeWoThe rk long-term lease contract is as high as $14 billion, and the company’s future minimum lease payment obligations are also $47.2 billion. Today, WeWork has only 2.473 billion cash assets on its books and still relies heavily on financing.
(The title map is from wework)