A few hours after reports that WeWork, who was laid off from the common workspace, is about to lay off 4,000 employees, the company finds itself at the crossroads of New York State.
According to Reuters, New York State Attorney General Letizia James has launched an investigation into the company's operations. “We received a request from the office of the Attorney General of New York and are collaborating on this issue,” a WeWork spokesman said.
Although the specifics of the investigation are not entirely clear, the company supported by Softbank has faced serious concerns over the past few months about the sustainability of its business model, which is based on a combination of long-term liabilities and short-term revenues.
He also faced criticism of his management standards, as founder Adam Neumann had colossal 20-fold voting rights for ordinary shareholders until his resignation from the company's CEO in September. Neumann, who has agreed to pay nearly $ 2 billion as part of his departure, will remain with the company as a consultant.
WEWORK is looking for a new head of T-MOBILE
However, growing condemnation led to the compilation of WeWork tables, and ultimately abandoned its plans to become public. This was followed by a package of financial assistance from Softbank, as a result of which the company's valuation decreased by almost $ 40 billion from $ 47 to $ 8 billion.
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WeWork last week contacted T-Mobile CEO John Leger to review the company's management as early as January, but Legere has since declined the offer.
Meanwhile, the drum roll of pending layoffs is getting louder. According to an email from The Washington Post, WeWork Executive Chairman Marcelo Klaur said layoffs will begin this week and are needed to create a “more efficient, more focused, and even more customer-oriented organization.”
The New York Times reported that 1,000 jobs will be cut from the payroll as a result of WeWork getting rid of its "non-core business." An additional 1,000 jobs performed by building maintenance staff will be transferred to an external contractor.
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