WeWork India lays off 100 employees, puts expansion on hold

“The first priority is to get the maximum value from our buildings and address the immediate need to reduce our costs by running our business as efficiently as possible - so driving more profitability from our current locations. What this also means (for the company) is that, in 2021, we will deliver only the buildings that we have already signed,” Virwani wrote in the email that CNBC-TV 18 has seen.

WeWork India currently has 34 operational spaces across the country.

“We need to make more fundamental changes to the company by streamlining our workforce around a more focused business strategy. This decision has led us to reduce approximately 20% of our workforce across functions and roles,” the CEO added in the mail.

The CEO said affected employees will have medical insurance for the rest of the year and will be helped by the company to find jobs through an outplacement agency.

The company in a statement said that the step was taken to build a “sustainable structure” and to meet the company’s aim of being profitable soon.

“We have optimised and planned our team strength based on the core business, as we continue to execute our long term business strategy in India and aim to be profitable by early 2021. We have realigned certain functions and teams to reflect our business priorities and a member-centric approach. While decisions that impact our people are some of the hardest to make, we believe that this step is required to build an effective and sustainable structure that supports the company and our members in the long term,” the CEO said.

Globally as well, SoftBank-backed WeWork is letting go of employees globally, as per reports.

WeWork India is owned largely by the real-estate player Embassy Group, which has a 90% stake and which was in talks till last year to sell a majority stake in the co-working business to the American company. However, those talks took a backseat post the unravelling of WeWork following its failed IPO attempt and the removal of CEO Adam Neumann.

Embassy Group had said late last year that it was looking to raise $200 million to put into the co-working business which it was looking to raise by March 2020. However, it is not clear if the fundraise has been successful. The company did not respond to specific queries on the fundraise.

Co-working spaces have taken a big hit from the lockdown, and have been receiving force majeure notices from customers who say they do not want to make payments for the time the space was not used. Co-working companies also have to negotiate with landlords on waiver of rent for the lockdown period.

CNBC-TV 18 was the first to report last month that the co-working industry was coming together to form an industry body called the Indian Workspace Association, which included members such as Virwani of WeWork India, and leaders of other players such as BHIVE, 91 Springboard and 40 others.