WeWork is going back to its roots.
In a repudiation of the excess of its erstwhile CEO Adam Neumann, WeWork announced Friday via an October 11-dated deck that it’s dropping The We Company’s push into activities that went past its “core” co-working business. Instead, it’s pivoting back to what it describes as its “pre-2017” model.
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The deck covers WeWork’s new 90-day “game plan” during which time it hopes to right itself.
The strategy isn’t entirely a rerun of the past; WeWork anticipates improvements. The company specifically calls for more focus on its “member experience,” and notes that its leadership model will be lean on “proven executives” to clean up what its previously “founder-led” strategy resulted in.
To understand the new, old WeWork, let’s explore the company’s plans. Recall how much this turnaround impacts SoftBank, the first Vision Fund’s results, and perhaps the entire existence of the second Vision Fund.
WeWork’s plan has four key planks: cutting extraneous operations, layoffs, boosting its real estate footprint, and sorting out its internal and external relationships. We’ll explore each in brief below.
The company lists Conductor, The Wing, Managed by Q, Meetup, SpaceIQ, and Wave Garden as “non-core businesses” it will divest. Wave Garden ranks among the most controversial of the company’s investments, as the firm’s technology is designed to help create artificial waves for surfing enthusiasts.
As we’ve reported, WeWork was on quite an acquisition spree before stumbling just short of its attempted public market debut. The company has made 18 acquisitions so far, according to Crunchbase. Its most recent, Spacious, was announced in August.
WeWork also stated in the presentation that it wants to “focus on the core WeWork desk business.” That’s a theme that the company repeats.
WeWork plans on making cuts across Ventures, G&A, and “growth-related functions,” according to the presentation. The company did specify, however, that community teams would not be affected by layoffs.
We’ve known layoffs would hit WeWork for some time. New executive chairman Marcelo Claure told employees at an all-hands meeting last month that there would be layoffs, though he wasn’t sure how many people would be let go. The Financial Times reported that it could be as many as 4,000 people out of the company’s approximately 15,000 person workforce.
While there have been reports that WeWork is dramatically cutting back on new leases, the firm claims in its new deck that it expects “record high” new “desk openings” in the fourth quarter. That should help the company keep up its torrid growth; how those openings will impact its cash position and operating burn is not clear.
Later WeWork notes that it also had a very busy Q3 when it came to desk additions, adding 108,000 new desks in the three-month period. According to its own calculations, that figure was up 109 percent compared to the year-ago result.
Less clear but also important are WeWork’s plans regarding fixing its PR issues, both inside and out. …read more
Source:: Crunchbase News