WeWork, the company that is either a transformative way of life or a dangerously overleveraged real estate company posing as a cultish tech firm, is planning on laying off thousands of employees.
… Just as soon as it can scrape up the cash for severance costs, anyhow.
Earlier on Monday, reports indicated that WeWork investor SoftBank was preparing a $5 billion bailout package that may give it 70 percent or higher control of the company at a valuation of $8 billion, a catastrophic fall from WeWork’s prior claims to be worth $47 billion. (As of just a few weeks ago, WeWork was still hoping for a valuation in the $20 billion range.) Business Insider later reported that staff received emails indicating there will soon be layoffs at the company; according to another report from the Wall Street Journal, sources say that 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 paper noted that SoftBank’s offer would cover buying “more than $1 billion of stock from existing investors and employees.”
But wait! What about founder Adam Neumann, the CEO dude who was asked to step down in September? Does he get anything?
However, the details around Neumann’s payoff were dramatically under-reported as the journal reports that Softbank will provide the former CEO with around $1.7 Billion as part of the deal (and extend a $500 million line of credit to the kabbalah follower).
SoftBank can’t scrounge up the severence cash, but they sure as shit can get founder Adam Neumann $1.7 billion. Got it. Thanks.