WeWork is planning to lay off up to 25% of its employees • Hacker News Board

Re: WeWork is planning to lay off up to 25% of its employees

#21

Post by dehrmann » Thu, Oct 03, 2019, 10:29 PM UTC

whateveracct wrote: post #3

big_chungus wrote: post #2

I hope everyone can take break from the we-work-bashing for a few minutes and agree that regardless of screwy business models, almost four thousand people being laid off is sad. I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion, it's still not a good thing.

> I suppose everyone is partially responsible for understanding the viability of his company and taking that risk in an informed fashion Nah, I'd say leadership is clearly at fault. Layoffs are pretty much always failures of leadership.

I think employees are at fault for empowering him and drinking the kool aid. Though I heard they pay really well, so maybe that's a sign a lot of people were passing on them because the business looked sketchy.

Re: WeWork is planning to lay off up to 25% of its employees

#22

Post by dehrmann » Thu, Oct 03, 2019, 10:33 PM UTC

softwaredoug wrote: post #10

Mockapapella wrote: post #5

I first heard of WeWork a few months ago. Seemed like just another company (admittedly I did very little to look into it). How is it that this company went from filing for public offering to laying off up to 25% of it's work force (along with a ton of other things I can't think of specifically at the moment) in just a few short weeks?

The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and…

> there’s no magic secret sauce IP or tech that makes WeWork special here

Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.

Re: WeWork is planning to lay off up to 25% of its employees

#23

Post by gniv » Thu, Oct 03, 2019, 10:37 PM UTC

Mockapapella wrote: post #5

I first heard of WeWork a few months ago. Seemed like just another company (admittedly I did very little to look into it). How is it that this company went from filing for public offering to laying off up to 25% of it's work force (along with a ton of other things I can't think of specifically at the moment) in just a few short weeks?

Matt Levine wrote a lot about WeWork in his Money Stuff newsletter. Start with the one from Sep 3.

Re: WeWork is planning to lay off up to 25% of its employees

#24

Post by itcrowd » Thu, Oct 03, 2019, 10:40 PM UTC

Running the numbers here. WeWork has 12.500 employees with 500 locations. That means on average 25 employees per location. That sounds absurd for workspace management, especially since construction / renovations / cleaning are most likely outsourced.

Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily operations of a workspace). That STILL means >10 workers per location full time.

No wonder the financials don't add up.

Re: WeWork is planning to lay off up to 25% of its employees

#25

Post by softwaredoug » Thu, Oct 03, 2019, 10:44 PM UTC

dehrmann wrote: post #22

softwaredoug wrote: post #10

Earlier quoted context omitted.

The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and…

> there’s no magic secret sauce IP or tech that makes WeWork special here Indeed; they don't really have a moat. For customers who travel a lot, there might be some network effects, but I suspect they're the minority.

I think there could be something to economies of scale, but in the How I Built That podcase, they brag about every space is bespoke!

I’d pay for a version of WeWork that let me camp out for $10 get self serve coffee but was drab, boring, and decidedly antisocial

Re: WeWork is planning to lay off up to 25% of its employees

#26

Post by foobar1962 » Thu, Oct 03, 2019, 10:45 PM UTC

softwaredoug wrote: post #10

Mockapapella wrote: post #5

I first heard of WeWork a few months ago. Seemed like just another company (admittedly I did very little to look into it). How is it that this company went from filing for public offering to laying off up to 25% of it's work force (along with a ton of other things I can't think of specifically at the moment) in just a few short weeks?

The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and…

> The brand for a while had some cash...

Couldn't resist fixing that for you. The little pun (homonym?) has some explanatory power for the company's current position.

Re: WeWork is planning to lay off up to 25% of its employees

#27

Post by Yhippa » Thu, Oct 03, 2019, 10:47 PM UTC

itcrowd wrote: post #24

Running the numbers here. WeWork has 12.500 employees with 500 locations. That means on average 25 employees per location. That sounds absurd for workspace management, especially since construction / renovations / cleaning are most likely outsourced. Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily…

What is the right number of workers per location?

Re: WeWork is planning to lay off up to 25% of its employees

#28

Post by crummy » Thu, Oct 03, 2019, 10:50 PM UTC

itcrowd wrote: post #24

Running the numbers here. WeWork has 12.500 employees with 500 locations. That means on average 25 employees per location. That sounds absurd for workspace management, especially since construction / renovations / cleaning are most likely outsourced. Let's cut them some slack and assume that half the workforce is focused on expansion (6250 employees) and that one in 25 are secretarial or HR (i.e. not related to daily…

Surely WeWork has most of their employees in just a few HQs? I'd guess they have a lot less than 25 people per WeWork coworking office.

Re: WeWork is planning to lay off up to 25% of its employees

#29

Post by rossdavidh » Thu, Oct 03, 2019, 10:50 PM UTC

xfour wrote: post #9

Was almost an inevitability it seemed like with all the other news, IPO ended etc. While this is a huge deal, is it really going to change anything about the underlying business? Let's say there's only 10% of employees or some very low number. Would then the Real Estate deals put in place vs. the Revenue received for re-leasing them pencil out positive?

I'm no expert, but...no.

Re: WeWork is planning to lay off up to 25% of its employees

#30

Post by skookum » Thu, Oct 03, 2019, 10:52 PM UTC

foobar1962 wrote: post #26

softwaredoug wrote: post #10

Earlier quoted context omitted.

The “How I Built This” on WeWork[1] was fascinating. Basically the 2008 financial crises increased vacancies in trendy places a lot. WeWork grew up with the trends in coworking. But really has turned into a very fancy middle man for turning buildings into beautiful coworking office spaces. The brand for a while had some cache, but the thing is many are realizing that they can also build beautiful coworking spaces and…

> The brand for a while had some cash... Couldn't resist fixing that for you. The little pun (homonym?) has some explanatory power for the company's current position.

Though the OP misspelled cachet, so I guess it should be "The brand for a while had some cash, eh?" :)