WeWork’s UK staff have been told to expect job cuts as the cash-strapped office workspace firm issued a formal notice of incoming redundancies while it steps up its efforts to tackle losses.
The company has warned European staff, most of whom are based in London, that job cuts are looming.
WeWork is thought to employ more than 1,000 workers in London and the UK, but is expected to scale back its operation in the wake of surging losses and a massive cut in its estimated value after a botched bid to float.
The setbacks come as billionaire backer Masayoshi Son staunchly defended his Softbank Group Corp.‘s stake in the co-working firm, which he said made up the bulk of its $6.5 billion operating loss for the quarter. With the New York-based company yet to turn a profit, it needs to convince investors that its business model is viable.
Softbank was an early investor in WeWork through its Vision Fund, sinking $13bn into the US company.
The managed office firm was valued at nearly $50bn at the start of the year, but it was forced to pull its flotation in September, following a lack of interest from investors and concerns over WeWork’s corporate governance.
“WeWork is in conversation with employees in EMEA as we make changes to our operating model and workforce in light of our refocused strategy,” a spokeswoman from WeWork said. “Leadership has been diligent in its decision making, and we are committed to treating our colleagues fairly and with respect.”