WeWork cut two-thirds of its staff as its valuation plunged $38 billion, the startup revealed in a new pitch to investors
- WeWork said it's trimmed its workforce by 67% since its peak in 2019.
- As of June 2019, the company employed 12,500 people, according to regulatory filings.
- The shared-workspace company is going public through a SPAC backed by NBA legend Shaquille O'Neal.
WeWork dismissed more than two-thirds of its employees over the past year and a half, it said in a Friday press release announcing a second attempt to go public - this time at a much lower valuation.
The shared-office space company said it has "streamlined headcount by 67% from its peak in 2019." While WeWork provided no specific figures, it's original prospectus from that year said the company employed more than 12,500 people, implying about 8,300 people lost their jobs.
WeWork is now going public through merger with BowX, a special purpose acquisition company, or SPAC, backed by NBA legend Shaquille O'Neal. SPAC's are usually blank-check businesses already listed on a stock exchange that take private companies public through reverse mergers, bypassing the typical initial public offering or direct listing.
The deal values WeWork at $9 billion including debt, and the company plans to raise an additional $1.3 billion. That's a steep decline from WeWork's peak valuation of $47 billion in 2019.
Shortly after filing its prospectus in 2019, WeWork came under scrutiny because of troubled finances and a partying culture stoked by founder Adam Neumann, who stepped down as CEO the same year.
That scrutiny brought the company's valuation as low as $5 billion in September 2019. The pandemic only made things worse. As COVID-19 shuttered workspaces, WeWork lost billions, even as it drastically cut expenses.
A year later, the company says "the pandemic has fundamentally changed the way we work, and WeWork is incredibly well positioned to springboard into a future propelled by digital technology and a new appreciation of the value of flexible workspace."
"Today, WeWork is a more focused company built around a core flexible space business that is poised for substantial growth," the company said.
WeWork, which remains majority owned by SoftBank, began operating in 2010 as a flexible workspace provider, and now it has 851 locations worldwide in 152 cities. The deal is pending BowX shareholder approval, which is likely to happen the third quarter, the company said.