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WeWork lays off 2,400 employees

cnbc.com

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Re: WeWork lays off 2,400 employees

#71

Post by uptown »

workthrowaway wrote: post #46
macspoofing wrote: post #30

Earlier quoted context omitted.

To be clear, Neumann's $1.7 billion payout is from SoftBank shareholders. There's nothing obviously criminal about SoftBank's bailout. But I agree SoftBank didn't have to do it. WeWork was ostensibly bankrupt and SoftBank could have dictated pretty much any terms they wanted.

i thought part of it were also consultancy fees for him to be a consultant for the company many years to come?

Yes, in the same way that high level employees leave those roles to spend more time with their families.

Re: WeWork lays off 2,400 employees

#72

Post by Frondo »

Strom wrote: post #69
dickeytk wrote: post #61

Earlier quoted context omitted.

They’re not destitute, no. But their employees were heavily compensated with options that are now worthless. Of course options are a risk, but they didn’t work there if they didn’t think those options would be at least worth something in the future.

Options in a startup are always a lottery ticket. I would argue that no rational person assigns any significant value to them, because even career investors aren't able to pick winners and instead earn money by betting on a lot of different startups.

People aren't and will never be rational economic actors -- homo economicus -- and while we can chide them for making mistakes a rational person wouldn't, I feel like there must be a way to structure the world that doesn't set up this expectation no one will ever live up to. (edit to fix a typo)

Re: WeWork lays off 2,400 employees

#74

Post by dickeytk »

Strom wrote: post #69
dickeytk wrote: post #61

Earlier quoted context omitted.

They’re not destitute, no. But their employees were heavily compensated with options that are now worthless. Of course options are a risk, but they didn’t work there if they didn’t think those options would be at least worth something in the future.

Options in a startup are always a lottery ticket. I would argue that no rational person assigns any significant value to them, because even career investors aren't able to pick winners and instead earn money by betting on a lot of different startups.

Big difference between a startup and a massive valuation that everyone assumes is about to IPO.

WeWork deflated more than any company in HISTORY. You’re technically correct but people are irrational and I’m sure they were being lied to their face in all hands about how great the future would be.

At that stage as an employee you’re counting on those to be able to put down a down payment or do a much needed renovation, or hopefully not payback debt.

Re: WeWork lays off 2,400 employees

#75

Post by acl777 »

Saw this posted in another related story:

If you're affected by the WeWork layoffs and looking for a new role, fill this out:

https://docs.google.com/forms/d/e/1FAIpQLSdx4TOVN7AdgvyAZGbq...

If you're interested in recruiting ex-WeWork folks, you can look them up here:

https://docs.google.com/spreadsheets/d/14CAtBsn3ZTL59tNMVbew...

original source: https://news.ycombinator.com/item?id=21199247

Re: WeWork lays off 2,400 employees

#76

Post by compiler-guy »

dickeytk wrote: post #61
Strom wrote: post #52

Earlier quoted context omitted.

I presume that by all the people who helped him you mean the WeWork employees and not investors like SoftBank. Well, these employees aren't walking away empty handed either. They've been getting paid all these years and most of them will probably continue getting paid for some time. That's also a fruit of Neumann's scheming. These people didn't have to fight for jobs in a real business, they are benefiting from the W…

They’re not destitute, no. But their employees were heavily compensated with options that are now worthless. Of course options are a risk, but they didn’t work there if they didn’t think those options would be at least worth something in the future.

Options are a risk you take, and every analysis out there says that one should discount them almost to zero, especially for startups.

It does suck for those employees that their risk didn't work out, but for most of them it was a conscious decision to take on the risk, presumably for a high potential upside.

And if you accept the risk, then its unfortunate that it didn't work out, but that is what risk is.

Re: WeWork lays off 2,400 employees

#77

Post by Strom »

ygjb wrote: post #70
Strom wrote: post #52

Earlier quoted context omitted.

I presume that by all the people who helped him you mean the WeWork employees and not investors like SoftBank. Well, these employees aren't walking away empty handed either. They've been getting paid all these years and most of them will probably continue getting paid for some time. That's also a fruit of Neumann's scheming. These people didn't have to fight for jobs in a real business, they are benefiting from the W…

> These people didn't have to fight for jobs in a real business, they are benefiting from the WeWork illusion of grandeur and bringing in paychecks month after month. Yikes. I have worked in two different startups that imploded quickly, largely due to an inability to find an effective sales and growth strategy. The fact that I was sold on the vision and that vision wasn't realized doesn't make the work I was doing an…

The jobs are definitely real and I was careful to not make any claims otherwise. I've worked in failed startups myself, so I certainly know.

As far as WeWork not being a real business, I think this was fairly well documented during the IPO attempt. However, more generally, when I say real business I mean a business that can survive without getting most of its funds from an unrelated source, i.e. investors. All evidence points towards WeWork not being able to continue without continued burning of investor money and there's no path to profitability on the horizon even.

Re: WeWork lays off 2,400 employees

#78

Post by p1esk »

gmartell wrote: post #60
munificent wrote: post #53

Hypothesis: Events like this are the modern moral equivalent of the giant, gaudy, gilt-encrusted palaces of the 17th century. Economic disparity has reached a point where those at the top end literally have more money than they know what to do with and are increasingly spending it on stupider and stupider things out of some perceived need to do something .

I like your hypothesis but fear the reality is less benign. To me it seems most ('those at the top' as you put it) do what they do in an attempt to obtain ever more money and power - never satisfied with how much they already possess.

So nothing has changed in this regard since 17th century, right?

Re: WeWork lays off 2,400 employees

#79

Post by deusofnull »

for a funny and informative recap of Adam Neuman's life leading up to the formation of WeWork, check out this episode from the Grubstakers podcast. Really, really wild the stuff this guy pulled and the bull it took to do so. https://soundcloud.com/grubstakers/episode-95-adam-neumann-w...

Re: WeWork lays off 2,400 employees

#80

Post by aeturnum »

berberous wrote: post #63
neya wrote: post #17

I still can't believe this guy gets to walk away with 1.7 billion dollars just for building up fluff while all the people who helped him grow have dire consequences both financial and personal. Unbelievable that this guy gets a clean chit, and all this isn't considered criminal. This to me is almost at the scale of Theranos. Only, this guy was smarter in the legal side of things, perhaps.

I don’t really see why it’s his fault investors over valued his company — he believed in his own spin and was phenomenally successful at building a large, real business. This was not like Theranos where he was straight up lying about a product working — anyone could analyze the business based on the fundamentals, and investors seemed ever willing to invest at high valuations. The self dealing was reprehensible and ev…

> I don’t really see why it’s his fault investors over valued his company

> he believed in his own spin

It's his fault because he accepted the price for his business! He was in numerous conversations where people wanted to invest in WoWork and he told them that the valuations they were investing at were not just reasonable, but under the real market price - which is why venture buys into companies.

> none of those events actually materially impact the value of the business

> overnight, investors just came to their senses about what kind of value this type of business is worth

These things seem like they contradict each other. If Neumann's actions are not material, why did his removal reveal the true value of the company? Material just means it changes the value of the company. There are lots of "material" events that don't have anything to do with business fundamentals.

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