According to an article by Bloomberg, the coworking giant WeWork is anticipating to cut back 7% of its entire workforce. The article also mentions how, for the time being, it looks like WeWork will abstain from new hires.
Not that long ago, WeWork was valued at a whopping US$16 billion, so eyes are being raised as to why this big fish in the industry is having to cut back on staff.
Bloomberg was able to gain access to WeWork emails, which is how they got news that managers would start letting staff go starting this week. One of the emails came from a WeWork spokesperson stating that the staff cuts come as a result of recent performance reviews and not as a result of lack of capital.
Nonetheless, Bloomberg hints that the overall slowdown in startup investment is affecting the coworking operator. In the last year startups like Jawbone and Snapchat have been advised to reduce their workforce as a consequence of this slowdown in investment.
WeWork isn’t likely to be short on capital, but these staff cuts do make one wonder if WeWork has reached and surpassed the peak of its rapid and unprecedented growth.
For the time being, however, it appears that WeWork will continue with its expansion plans in various cities around the world.