Awaiting Layoffs, WeWork Employees Say Founder’s Payout Is ‘Graft’

In a letter, workers asked executives to treat those who will lose their jobs humanely while giving people who remain more say in decisions.

Comments: 54

  1. Maybe the company can give them each a bottle of tequila on the way out? Compensation for underwater stock options? Ha! Welcome to the world of corporate capitalism. You followed the prophet and he led you down the predictable path- good for him, bad for you. At least you get fired in a great economy, unlike millions who lost their jobs in 2008-10. There are plenty of jobs, albeit without the messianic overtones.

  2. @Peter I'm sorry to say it, but I agree. I'm an architect and have seen colleagues leave to join wework in large numbers. I got recruiting offers myself. It was always obvious that it was too good to be true. There are many firms out there that design office space. Here was this company offering significantly higher salaries for the same work--why? It was obvious that they were pumped up with venture capital dollars, needed architects for their mega-growth machine, and when that growth was attained, most of the design staff would have been out anyway. Architects discussed this among themselves frequently, and older practitioners who had been through recessions and such warned the younger ones. This is an unforgiving profession and I actually think having wework on their resumes will actively hurt a lot of these people when they look for their next job.

  3. I don’t believe it will hurt their resume. Sure, the design force employed a considerable number of green designers who did not receive the proper mentorship and skill building of a traditional design firm, but despite all the detractors, WeWork truly was a tech startup on the production side. The technologies deployed (and created) to help aide WeWork’s growth will be a huge asset to the design world once it promulgates through the system.

  4. It draws a line, but perhaps by engaging with WeWork's clients and getting their feedback could have a big impact for the employees. As an example, are there good relations with the clients and the cleaners? A customer's voice is worth a lot.

  5. WeWork is not the only company that bears scrutiny. SoftBank has a complex financing scheme that reminds me of Enron. If you read enough articles you will get a picture that there is too much money promised in too many places . The private markets also need to be looked into. Opaque business plans and financial engineering frauds culminated in the last two stock market melt downs Is Dodd-Frank strong enough to keep this next collapse corralled to a minor corner ?

  6. Very unfortunate outcome. I think it is great that workers are banding together and trying to make the best of it - and looking out for those at the bottom of the WeWork food-chain. But the stock-options? That’s essentially saying that you want all the potential upside of a startup with none of the downside. If you find stock options are part of your compensation package, think of a big roulette wheel; it will help when your number does not come up. The payoff to Neumann? Sickening. I’m glad it’s private money going down the sinkhole this time, but sorry for all the rank and file that take the brunt. Tent story is quite the WeWork allegory...

  7. @SD Not quiet. WeWork is basically an exposed ponzi scheme. The business model is a fraud. Don't the employees share some responsibility for being part of the charade? Agreed on Neumann's payoff being absurd. Don't worry though. They'll be lawsuits over it going on for years.

  8. The ideal solution would be for all employees to quit over the period of a few days effectively dismantling the company wiping out the drifters remaining consulting fees.

  9. This isn't the 90's before the tech bubble bursting in the early 00's when stock option percentages of equity were reasonably fair considering the risk and amount of work. Now, it's a checkbox (unless you are truly early) and even early folks don't get the percentage equity they used to. With the complicated stock structures, Skype-like preferences in buying back purchased options, and greater inequality of stock distribution, even if you reach IPO, the payouts might pay back your overtime for the years of extra hours you put in. I do hope the WeWorkers get a fair exit package, and that Neumann sees his lottery ticket platinum parachute reduced. Neumann doesn't deserve to be rewarded so richly for problems he has caused.

  10. So typical. The workers lose their jobs, and Neumann, who drove the company into the ground, walks away with $1 billion. Want to know why voters like Bernie and Warren? This is your answer. What we have now is Socialism for the rich, and penury for the workers.

  11. @Barbara Barran Good point, but I'd still never vote for Bernie or Warren.

  12. @Tall Tree I'd vote for Bernie or Warren now, because after this next GOP collapse it's going to get really ugly!

  13. The problem can be traced back to the corporate structure, something many people don't pay attention to when choosing a start-up to work for. Neumann owned "super" shares that gave him 10:1 voting rights, which left the Board pretty much powerless to get rid of him without his consent. They didn't want to give him that huge severance package...they had no choice. That was Neumann's price for agreeing to disappear.

  14. A perfect example of how the tech and financial industries work. Neumann gets $46 million per year, the company buys him a $60 million private jet and then a $1 billion severance when fired for egregious behavior as WeWork implodes. Meanwhile service employees become hourly contractors and engineers are suddenly laid off.

  15. @Todd It's the American way.

  16. Welcome to the real world. You are the only one who will look out for you and your career. Companies may talk about a 'Family Environment' or ' People Power' or other such feel good slogans, but when things get tough, those at the top get their Golden Parachutes and you are shown the door without even a hanky. Do a good job because that is what makes you feel good, but never forget: The loyalty arrow only goes one way. These observations are the result of a 45 year career that spanned from low to high, from the East to California, in industry, non-profits and retail, union and non-union.

  17. @Bruce1253 The obligation of the worker to themselves, is to always be improving themselves so they can gain better employment, higher salary, and or stability in time of layoff. employees that don't do that and instead sit back and demand the "company" give them something are doomed to become something..... unemployable.

  18. The founder of the company is entitled to whatever he wants. It's not like he was hired later. You would not have a company without him. Nevertheless, it is hard to live with.

  19. @Grittenhouse No the founder of a company is not entitled to whatever he wants. He has legal and moral obligations. Adam Smith, the author of the "Wealth of Nations", generally considered the father of capitalism and some even believe economics, was by profession a moral philosopher. Prior to writing the defining economics book, he wrote "Moral Sentiments", a book that included a description of the moral expectations for business owners. He clearly expected capitalists to act morally with concern for their employees and the public. He did not believe in the principle of absolute, short-term profit maximization that drives most executives today.

  20. reminds me of the demise of my job at GM in 1987 as a result of a plant closing and where thousand of hourly employees were let go. I maintained a longstanding anger against GM for this, and to this day I refuse to buy a GM vehicle. good luck to those on the brink of losing their jobs or possibly contracted out from wework. my only advise is that their stand by aggressive and one there is no apology on their part for actions taken against a giant who lives without a conscience.

  21. Order of magnitude math on this: $1 billion payout. 10,000 employees. Comes to about $100,000 per employee. So the CEO's payout along could employ 10,000+ people for one full year each. Doesn't make much sense.

  22. Duh...Republican or Democrat, CEO or politician, this country's "leaders" share one seemingly genetically based behavioral trait...perverse greed, aka sociopathy.

  23. Neumann should go to prison. With his board.

  24. Services and technologies that have no other mission, except to "disrupt" are always unstable, operate as a roulette spin against investor bets, and have no real concern for staff. The problem is the startling dissonance between happy-talk about culture or values and what ends up happening to people who work there. Why do we never celebrate entrepreneurs who want to both make a sound, useful product or service AND create a great place to work for people they actually value? Instead, we hear about big money "unicorns" and other frothy flim-flams that are mostly rent-taking operations that add no value to our society.

  25. Sham Scamman of WizWonks mastered the art of failing up! This new abby normal economy where winner takes all and the crumbs and bag holders hit the bricks. Ahhh.....the new American SCREAM economy was once a beautiful dream because you had to be asleep to realize it!

  26. The Dark Side lives. When push comes to shove, the big boys will protect their own.

  27. WeWork never had a profitable business model but was kept afloat by Softbank's moronic investments and valuations. Softbank is responsible for Neumann retaining control even though Softbank owns 80% of the stock. So it dumped in more cash to gain control and postpone the inevitable. These employees had it good for awhile but the party's over.

  28. People who follow bunco artists like Neumann never learn. He, like many others, is basically amoral and assumes that the workers who follow him are just as amoral as he is. The word "humanely" doesn't exist in his vocabulary.

  29. Welcome to capitalism kids. Next time, join a union!

  30. Is this a joke? Because it’s not funny. WeWork expanded by borrowing from A to buy real state, then tried to sell stock to borrow from B to pay A. Meantime the real state goes on used. If they want to sell it back, they have to over price it to cover their losses. They will run out of cash any day now, and all this ‘humane’ garbage will go by the way side, with a big sign at the door: get out. News for you people – your company will not have a penny to over your unemployment vacation, much less pay you a divided. Smell the roses people.

  31. 99% of these tech employees would laugh hysterically at you if 5 years ago you advised them to organize in a union. Now who's laughing?

  32. No one deserves 46 million a year. No one. This is sickening. And now people are going to lose their jobs. Perhaps Neumann should divide one year's salary by the number of people being laid off because of his incompetence and give it to them so they won't lose their homes or apartments. Can I say it again? 46 million a year is sickening. It shouldn't even be allowed.

  33. @Katie so if I, with my idea/experience/hard work, build a billion dollar a year, you think I am not worth the 46 million I might get paid? I would be willing to bet if anyone said that about you and whatever low level work you do, you would get into high-dungeon about what you deserve and how you are the best in your area blah blah blah.

  34. Adam Neuman was no less of a con artist than Bernie Madoff was. The only difference being that he had a raft of lawyers vet every one of his efforts to "steal" money from the company. Neumann and his lawyers ultimately won, while investors and workers lost.

  35. @Biggs please explain how he "cheated" the company...not the sour grapes being expressed by so many here, but the exact illegal acts he took. The investors and board approved the rapid expansion and unprofitable growth, so what did Neumann do beyond that to qualify him as a Bernie Madoff level scammer?

  36. It’s easier to get a new job when one is currently employed. Of course, we all feel terrible for WeWork employees. However, speaking for myself, I’d have jumped ship as soon as I learned about how deeply messed up things were with their egomaniacal leader.

  37. So the grifter that started this scheme walks away with a billion dollars and the people who actually worked get nothing.

  38. Nuemann is the epitome of greed and lack of accountability. This is why so many people are tired of the 1%. Private jets while people are going to lose their jobs?

  39. @Richard Johnston yet those other people, the 99%, are NOT building companies and employing other people. One of the funny things that happens when the few of the 99% do actually start their own companies, is that their thinking immediately shifts to mirror that of the 1%. When you learn the actual costs of doing business and experience how whiny, self-serving, and demanding some employees are, your perspective changes quickly. you will never experience that learning.

  40. Soft Bank lost billions it invested in WeWork yet somehow had to pay Andy Neumann another billion on his way out, plus "consulting" fees. He should have left with his tail between his legs and his worthless shares in the company he founded and then mismanaged - I'm sure he has millions in investments, homes & that private jet. Yet it is going to be thousands of employees who are going to be fired or replaced by lower-paid contractors, and somehow that's supposed to be good capitalism. Phooey.

  41. The end game of WeWork (or We Company or whatever) has only just begun. The employees will wind up with no voice whatsoever because there will likely not be a company when the dust settles. The layoffs will be a footnote to the fight that will soon start as We tries to get out of leases for underperforming office sites; if you think that these suddenly overexposed landlords will take this existential threat lying down, you are as gullible as everyone who bought into Neumann's hippy-dippy Ponzi scheme. It would come as no surprise if certain landlords decided that they would rather cherry pick the profitable locations for themselves. Since each site is likely actually leased to one or other special purpose vehicle (SPV), given We's penchant for extremely complex, yet self-serving, business stuctures, it's well within the realm of possibility. Look for a feeding frenzy among bankruptcy and real estate counsel as the real action starts. There is nothing there for the employees. For many in the near term, no job. For anyone foolish enough to stay, no future and likely no company. They would all be better off trying to forget Neumann's messianic ranting, bail out, and try to find new jobs.

  42. I file this under "there's a downside for everything". The whole "work as substitute for religion" thing was great for higher ups when they conducted their workplace in a way that was vaguely kind of consistent with what most people in the US think of as a "religion". Once they started deviating from that they started finding out that people who invest almost their entire identity in something will get pretty angry if their "identity" is changed to something they don't want. I guess there is an upside to a workforce that is there to go in, do a job, and then go home and live their life.

  43. This is another sad example of what is driving income inequality in this country. One man receives an exorbitant income of over $48 million per year while mismanaging the company so badly that he is forced out and thousands of employees will be laid off. What is his punishment, a $1 billion exit package. What is wrong with the way capitalism is working in America? I guess we should get it from the name - "capitalism" is rule by those with capital and the system is stacked against those without.

  44. @Rocky/ No, what this primarily demonstrates is White male privilege. Neumann leaves with a 1 Billion severance, Elizabeth Holmes was investigated for Fraud and was the subject of several cautionary biopics whose arguable purpose is to drive home that woman can’t be trusted in business. Now, before anyone gets too riled, I admit there are differences here: Neumann’s company still has enough assets that were worth enough for Softbank to buy it, while Holmes’ company had at best some modest intellectual property. But the shambles are not THAT dissimilar and are those dissimilarities really different by 1 Billion (That’s Billion with a “B”?). Plus, can anyone say with a straight face that if Neumann was female, a Person of Color, or both we would be seeing a goodbye present of that magnitude?

  45. The only humanity these people will receive will be some public relations firm phony worded manifesto wishing these people good luck. Meanwhile all the golden pheasants will walk away with millions of dollars.

  46. Note to WeWork employees: don’t believe anything you’re told, and those who get out first will get the best deal. Neumann and his spouse looted this thing a long time ago.

  47. Neumann leaving with that kind of severance while leaving the rank and file with such pitiful packages and assistance is obscene. If he had ANY decency, he would do some kind of symbolic gesture where he takes $1.00 and gives the rest to the employees. If he is so deserving of that kind of money, it should be no problem for him to be successful again. I mean he has all the markings of a natural-born winner any investor with a modicum of sense could see: For example, he's White, het, male. I mean, common, THATS a winner in anyone's book !

  48. The company rented out overpriced beanbag cubicles and gave away free snickers. You are not changing the world. How the used car salesman is able to walk away with $1b is both ludicrous and hilarious.

  49. A former Makerbot employee says welcome to the club.

  50. WeWork was not the only company in NYC that started with the premise of providing shared communal workspace for freelancers and “creatives.” The ones that stayed true to that goal failed because there was never enough money coming in to pay for the space, and permit a profit. WeWork’s strategy quickly changed to profit off the corporate desire to outsource. For decades employment categories have been outsourced; beginning about ten years ago, corporations increasingly desired to outsource their real estate portfolios essentially. With almost inevitable results. I wish the WeWork workers luck the best in what is to come. The one comfort I see is workers banding together for collective action. Maybe this is another example in a US union renaissance.

  51. they are demanding that janitors sit on the board of directors, or near enough. does that really make sense for a business to do that? I don't think so, particularly to one that is already looking to shed employees and cut labor costs. some things would be nice to change, like losing that arbitration clause, but allowing the lowest, least educated and least experienced employees to "sit at the table" when making the biggest business decisions is a socialist agenda. If you want to be the boss, start your own company, if not obey the rules you agreed to when your boss hired you.

  52. At the high end of Neumann's estimated going away present ($1.7BB according to some sources) this would work out to roughly $340,000 for each of the 5,000 employees said to be laid off in the first wave. Using the lower figure for Neumann's payoff, each would get $200,000 as severance. Where is the old kibbutz spirit that animated the company when Neumann needed people willing to work for the promise of stock awards?

  53. Remember Enron, WorldCom, Tyco, Adelphia, HealthSouth, Excel Communications, Global Crossing? As anyone awake at the Trump SEC? A CEO basically stole $1,000,000,000 from investors and no one is talking Sarbanes-Oxley?

  54. We Work workers Good Luck! There is nothing in the Pot left for you, it went to Adam Neumann. Obviously he was a total fraud but was empowered by Misters Son and Dimon who are covering him financially. How they weren’t looking deeper while investing and loaning billions of dollars is unbelievable! Watch the MSNBC interview with Jaime Dimon, he’s very uncomfortable when asked about his role with We Work.