Layoffs have become a common phenomenon in these unprecedented times. The coronavirus has impacted several businesses, forcing them to resort to tough measures like cost cutting and downsizing. The recent company to fall in the crisis is shared office space startup, WeWork.
Recently, WeWork India said that it has laid off nearly 20% of its workforce, or about 100 employees as the company struggles due to the government imposed lockdown which forced the closure of offices.
The decision was announced by company Chief Executive Officer Karan Virwani during an internal meeting on Monday. An email was also sent out to employees stating that there was an “immediate need to reduce costs.”
The company has also decided to put expansion plans on hold. It is currently planning to work on spaces it has already signed or either is in the pipeline.
“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.
WeWork India currently employs 500 people and 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.
Virmani said that 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 optimized 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.
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