What It’s Like to Be Stuck Inside the Wreckage of WeWork
Credit to Author: Brendan O’Connor| Date: Thu, 24 Oct 2019 21:14:51 +0000
For all of the financial convulsions that WeWork, the office space company that sought "to elevate the world’s consciousness," has gone through since its efforts at an initial public offering fell apart last month, nothing about the way the company works, in the end, has fundamentally changed. Proof of that is that Adam Neumann, the wild-eyed and inexplicably charismatic grifter who charmed the international venture capital class, will walk away from the company he founded with $1.7 billion, while thousands of workers pay the price.
Earlier this week, WeWork struck a deal with one of its biggest investors, the Japanese tech giant SoftBank, to pour another $10 billion into the flailing company—on top of the $9 billion it's already invested—giving it an 80 percent ownership stake in the company in return. "I just want to say with great gratitude, thank you to all of you, but also to our new partners in SoftBank," Miguel McKelvey, WeWork co-founder and chief culture officer, said at an all-hands meeting this week, according to a transcript obtained by Vox. "Incredible gratitude to them for believing in all of us."
According to the Financial Times, WeWork intends to lay off as many as 4,000 people, or about 40 percent of its global workforce. The company is also reportedly looking to outsource about 1,000 of its cleaning and maintenance staff jobs, and, according to current and former employees, the rumor going around is that the layoffs will likely focus on tech and design.
"These are people who might be more inexperienced, it's probably their first job. Younger kids just coming out of school—they thought it was sick, they totally bought in. They're gonna go to the next company and be totally taken aback," one current employee told VICE. "A lot of them might not be aware that they can stand up for themselves." (VICE is granting sources who work or have worked at the company anonymity because they fear retaliation.)
Union organizers like Seth Goldstein, a senior business representative for OPEIU Local 153, which represents workers at Kickstarter, have been pressing WeWork employees to rise up. "Why should Adam Neumann get a $1.7 billion payoff while thousands of WeWork employees have to worry about paying next month's rent?" Goldstein said. "WeWork employees have nothing to lose. They do have an opportunity to take immediate collective action, protected under the National Labor Relations Act, to demand WeWork, Softbank, and Adam Neumann pay fair severance, end non-compete agreements, revoke non-disclosure-agreements, and rescind forced arbitration agreements." In recent years, the company has been hit with multiple discrimination and harassment lawsuits. (WeWork did not respond to a request for comment.)
By and large, workers on the "community" team feel that they are safe. "Community is the team that is the heartbeat of the building, and what are they gonna do without people to run the building?" the former employee observed. But the people doing art, design, and tech are less secure. "They’re worried. They’re applying for jobs." If cuts have to be made, "maybe then don’t have Lorde as a headliner," as the company did at a corporate retreat last year, said the former employee. "Maybe close the open bar. Trim that fat, not the people who are working."
The current employee concurred: "[Neumann] just gets to continue to be reckless and get away with it, and we are left holding the bag," they said. "We all feel like his greed has really shown its true colors over the last 12 months. He just tried to get as much as he could, as quickly as he could."
Do you know something about WeWork, or any other company, that we should know? You can email Brendan O'Connor at brendan.french.oconnor@gmail.com
But there's been a snag: apparently, the company doesn't have enough cash on hand to pay severance to all of the workers it wants to lay off. Until it does, the workers are in limbo, waiting to find out whether they're going to lose their jobs while the CEO walks away with hundreds of millions. Speaking to these WeWorkers, however, it becomes clear that this kind of contradiction is the rule, not the exception.
The current employee, who is based in Europe, had been working for a company that was acquired by WeWork on what seemed like a whim. "Our CEO started going to Kabbalah with Adam and started encouraging everyone to do the same," they said. "He really got sucked in."
One of their first interactions with the We Company proper was at that year's Global Summit, attendance at which was presented as basically compulsory. "They have all these policies about environmental impact, and yet they flew 7,000 people to a park in England for what was basically a festival," the WeWorker said. "I'm 30. My festival days are behind me, and it was all these young, gorgeous people—tons of booze, and not a lot of food. There was nothing I gained from it." On the first night, they wouldn't feed anyone until Neumann and co-founder Miguel McKelvey had finished speaking. "All these people were standing in line for vegan hot dogs from the food trucks or whatever, getting agitated. The vendors felt awful. Everyone just staring at each other," they said. "It was absurd."
The former employee, who is based in the American South and was laid off in March after nearly two years at the company, also recalled sleeping in a tent for four days to hear the company's co-founders pontificate at the global summit in England. "Listening to Adam speak was like Red Bull personified. He'd just be saying ideas that he’d never discussed with his team that people would then have to scramble to build outlines for. Listening to Miguel was like listening to weed. He's all about the vibes," they said. "Adam was all about, 'We’re gonna change the world.' Miguel was like, 'We are the world.'"
Both the current and former employee suggested that the structure of the company lent itself to failures of communication and inefficiency. "There are all these people at the top, put up on these pedestals as brilliant visionaries who will never admit when anything's going wrong, and all the rest of the company is just community managers," meaning workers who interact with tenants in WeWork spaces, the current WeWorker said. "Nobody is running the day-to-day business. It's such a shit show. Trying to get finances approved, expenses done—anything that a real company of that size should have the infrastructure for—it's a nightmare."
As the former employee put it: "Being flexible at WeWork is too rigid—you have to be fluid. You can’t just go with the flow, you have to be the flow."
At this year's summit, in Los Angeles, the chief financial officer, Artie Minson, walked on stage to Bob Marley's "Three Little Birds," wearing what appeared to the former WeWorker to be a Tommy Bahama shirt. "How many of you have gotten emails, phone calls, texts about Softbank pulling their investment?" they recalled him asking. "Well, you can tell them that your CFO walked out in a fucking Hawaiian shirt to tell you that 'every little thing is gonna be all right.'" A few months later, hundreds of workers were laid off, including the employee I spoke to. Minson is now co-CEO and has reportedly secured a multimillion dollar severance package.
All of this gestures towards a broader point about so-called "unicorn" companies—startups valued above $1 billion—the current employee observed. "They get these massive, bloated valuations, they're allowed to do too much, too fast, without the proper parameters in place, and then it's the employees and their families who are hurt," they said. "The guys at the top aren't really affected."
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This article originally appeared on VICE US.