Hundreds of jobs at WeWork’s Australian work hubs are in jeopardy following its floundering American parent company’s decision to shed 33 percent of its employees because of financial difficulties.
The severances follow WeWork’s decision last month to put three of its businesses up for sale to generate cash flow.
At this stage the fate of WeWork’s holdings and employees in Australia is unknown and the company is refusing to speculate on their future.
WeWork has 20 hubs in Australia catering to start-ups, freelancers and innovative entrepreneurs – 10 in Sydney, five in Melbourne, three in Brisbane and two in Perth.
Australian representatives of WeWork have previously refused to comment on the financial upheavals affecting the parent company.
“Thank you for reaching out. We are in a quiet period and so will decline to comment,” Tanya McCloy, the senior manager of public relations has said.
The Information newsletter says WeWork is planning to cut at least one-third of its technology employees in America – around 500 jobs.
The sackings will be drawn from 1500 software engineers, product managers and data scientists employed in the technology division.
Quoting an anonymous insider, The Information newsletter says 350 of the job cuts would come from WeWork’s main corporate division with an additional 150 jobs being cut from the spin-off sale the company is planning of businesses it has acquired in recent years.
The three unnamed businesses are said to provide services for WeWork’s co-op suites of shared office space including cleaning, arranging meetings and marketing, according to The Information newsletter
Insiders see the company-shedding as WeWork’s practical reaction to the desperate need to cut costs and raise cash.
The projected job losses continue the dire financial stress on WeWork as it struggles to maintain an international identity with outlets in major capital cities like London.
Two months ago the company was forced to shelve plans to launch an IPO after a poor public reaction and co-founder Adam Neumann has since stepped down as CEO, under pressure from the board.
WeWork’s problems started with the IPO plan when it could not produce financial records to justify its supposed valuation of as much as $US70b.
Some valuations put the company’s value as low as $US10b.
In Sydney, WeWork prices start at $2380 a month for a private office to $550 a month for a hot desk.