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Businesses The Almighty Buck IT

WeWork Says It Will Divest All 'Non-Core' Businesses (cnbc.com) 42

Posted by BeauHD from the cost-cutting-measures dept.
WeWork released Friday a "90-day game plan" that details sweeping changes to its businesses, including a divestiture of all "non-core businesses" and a reduction in headcount. CNBC reports: The changes are detailed in a nearly 50-page presentation, which was first put together in October as part of a pitch to investors, but was made public on Friday. WeWork said it plans to divest several of its side ventures, including content marketing platform Conductor, women-focused co-working start-up The Wing, office management platform Managed by Q, Meetup, real estate-focused start-up SpaceIQ, workplace software company Teem and Wave Garden, a maker of wave pools.

The company expects job cuts to occur across its ventures, G&A and growth-related functions, but said the community teams, which oversee WeWork's physical locations, will not be impacted as a result of the move. WeWork plans to focus on the core office-sharing desk business, in an effort to turn around the struggling company, as well as "re-energize employees" and "realign performance incentives." Specifically, the company plans to turn its focus toward enterprise customers, rather than the small and mid-sized businesses, such as start-ups, that it offered leases to in the past. The company also said that it would be led by "proven executives in membership-focused, subscription-based businesses" moving forward, instead of being primarily "founder-led."
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WeWork Says It Will Divest All 'Non-Core' Businesses More

WeWork Says It Will Divest All 'Non-Core' Businesses

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  • Who cares really...

    • This is just SoftBank throwing good money after bad. The CEO literally said he thought WeWork was going to be another Alibaba.

      • Re:Another dotbomb 2.0 (Score:5, Insightful)

        by indytx ( 825419 ) on Saturday November 09, 2019 @07:59AM (#59397072)

        This is just SoftBank throwing good money after bad. The CEO literally said he thought WeWork was going to be another Alibaba.

        This was never going to be another Alibaba because the business model is completely stupid. When you're losing money in REAL ESTATE, and your strategy is to get bigger, faster to go public, to continue to lose money in REAL ESTATE, you're doing it wrong. I have been reading the WeWork stories in the WSJ for some a while, and my first thought after reading one of the early articles was how stupid the business model was . . . essentially a middleman office rental agency which was losing money. Consistently. Umm, wow?

        This was sold as some sort of a technology company, but it was really just a [building management company] + [pothead, kibbutz-raised, hippie CEO/huckster/carnival-barker] + [free beer]. The only reason this is "News for Nerds" is because it was marketed as something "nerdy," but the "nerdy" that was being marketed was about like a Marvel movie being marketed as science fiction.

        While this is not a Theranos 2.0 situation, it just amazes me how people can get so excited about an IPO for a company which does not have a viable path to profitability. That this stupid company was ever a major business story says so much about what is wrong with modern business, because a large corporation can be exciting and attract investment--not because it's profitable--but because investors think that they will sell the stock for a profit. As a small business owner, it annoys me that the excitement was never about the dividends but about the growth potential of the stock and the suckers down the line after the IPO.

        • It's classic, "we losing money on every sale but make up for it with volume". A buddy of mine tried to sell me on this stuff 2-3 years ago. All I had to do was take a huge pay cut, move to the other side of the country, take a lesser role than I'd had in 20 years, and wait for the ipo that would make me rich, rich, rich! With no real research at all it was obviously dot com era bulkshit and needless to say I didn't even send my resume in or talk to anyone. SoftBank has certainly had a number of super w

          • To be fair, they almost made it to IPO and a lot of similar companies did and make everyone rich (see Beyond Meat)

            • There's a difference between most of the other IPOs and WW. I've seen beyond meat offered in random restaurants on the menu. They -could- turn into something really big. Where as WW was a scam to suck money out of SB and the market to make Neumann rich. It was certainly successful in the sense of that was the only goal of the company. As a going concern that could EVER be profitable it was a joke and I'm very glad everyone involved got crushed. Including the employees who had to know their company and

              • Agreed, Wework and Beyond Meat are different. For a very specific reason.

                Beyond Meat has a product different from any established companies. Yes, other companies such as Morningstar Farms have made meat substitutes for vegetarians, but rhe product isn't very similar to meat and is only attractive to vegetarians, probably mostly new vegetarians who haven't learned how to have a good meal without meat, people who are still trying to eat chicken nuggets while being vegetarian. A very limited market. Beyond Me

                • Re: (Score:2)

                  by PCM2 ( 4486 )

                  I would add that real estate is a very different business to selling a packaged product. If your product isn't flying off the shelves this month for some reason, you slow down the assembly line. You can't do that with a 10-story building. Any portion of that square footage that isn't being "subscribed to" during any given month is money you're not making, while you still pay for property tax, maintenance, building staff, and whatever other fees you incur. Conversely, if you're consistently filling it all up

            • Except the share holders when Beyond Meat shrinks down to just another protein patty maker for vegans ... albeit a first mover in the gluten/soy free space.

            • They're doomed now:

              WeWork said it plans to divest several of its side ventures, including....women-focused co-working start-up The Wing

              They publicly DARE to drop anything that is dedicated to women?

              They'll be crucified!!!

        • While this is not a Theranos 2.0 situation...

          Theranos _did_ have a way to profitability: Just come up with the goods that they had promised. Make it work. What stopped them was that they couldn't deliver.

          WeWork absolutely delivered what they promised. Just that what anyone with half a brain would have known that what they promised would never lead to profit.

    • So we more or less repealed Dodd-Frank (Score:4, Interesting)

      by rsilvergun ( 571051 ) on Saturday November 09, 2019 @11:36AM (#59397312)
      which if you're not familiar is the law passed after 2008 to stop Wall Street from crashing the economy again. The Trump administration (with plenty of help from "Third Way" Dems like Pelosi & Schumer) couldn't just repeal the law (it would have made headlines) so they just chipped away at it with rider after rider during the first 2 years of his presidency while they held the House & Senate.

      So now the gates were open for the same risky tactics that caused 2008, but there was no housing boom to play in. So what to do? Business loans.

      So you've got billions and billions (maybe trillions by now) in dodgy business loans that are being packaged up into derivatives similar to the house derivatives from just before 2008. We Work is almost certain one of those.

      Eventually those businesses will collapse, then the house of cards our current economy is built on goes with it.

      That is why you should care. We might (_might_) still have time to put people in charge of our gov't and economy to fix this mess.

  • Golden Parachute (Score:5, Insightful)

    by TheReaperD ( 937405 ) on Saturday November 09, 2019 @07:09AM (#59397022)

    2000+ people are being laid off but, the executive being fired gets a 1.7 billion dollar buyout. Corporate greed at its finest.

    • Given 1.7 billion dollars to go away permanently. There are several General Electric CEOs where that amount would have been cheap compared to the damage they did by hanging around.

      • A bullet to the back of the head is WAY cheaper.

        Hell... even a prison cell to keep him in for life would cost FAR less.

        See... There ARE alternatives.

    • Comment removed based on user account deletion
  • Comment removed based on user account deletion

    • They had other focused spaces too:
       
      The Bling - for rappers
      The Right Wing - for NeoNazis
      The Left Wing - for Bernie Sanders supporters
      The Swing - for swingers

  • Just a long term lease sold at a loss to short term leasers business? How many more billions will they need to get profitable?
    • Infinite billions because their business model is fundamentally flawed. Chopping up a large space on a long term lease into numerous short term leases simply can't work. The efficiency isn't there. And if you raise prices enough to make up for it then you're too expensive and it becomes smarter for the real subs to get their own space elsewhere which only exacerbates the problem with having a bunch of 1-2 seat short term rentals dropping by until they move on to real digs of some sort. WeWork can NEVER

      • I assume the funding of lesser scam startups was the the pothead in charge his twisted concept of paying it forward.

      • It works great for IWG, Regus' parent company [yahoo.com]. They are the masters of short-term, flexible leasing, and make a good net profit (about a 10% net margin). They even pay a dividend. IF you do it correctly, it can pay off handsomely. The key is, you don't give away free beer, and you don't own wave pool companies...

      • Re: (Score:2)

        by DarkOx ( 621550 )

        Chopping up a large space on a long term lease into numerous short term leases simply can't work

        Ever hear of a Hotel?

        Sure it can work, but WW has vastly over estimated the market for it; has not positioned it right; and has chosen its actual properties and locations suboptimally for their real business model (which they don't apparently understand).

        If WW figured out they are not a tech company they might even find a way to make money.

        • Hotel? Yes, I know the hotel business very well. It's very different from renting office space and certainly very different than sub leasing space to re-rent to short term small businesses on a shared desk model. I'll give you one huge difference that non-hotel people will understand: events. Larger hotels make a fuck ton of money on conventions and one-off meetings and other events. Does WW do this? Hotels have restaurants. WW? Hotels have known seasonal patterns based on regional activity. Does W

          • Re: (Score:2)

            by DarkOx ( 621550 )

            I'll give you one huge difference that non-hotel people will understand: events

            Right and you know what companies have events all the time. Large department meetings, training sessions, etc. A lot of these don't often work all the well in hotels because they want to keep their event spaces generic so they can also be used for things like wedding receptions. So it ends up being rows of tables and folding chairs and projector at corporate events. A company like WW (again if they understood their own business) could deliver a better product here ant TAKE some of that business.

            Hotels have restaurants

            And corpo

            • We're in general agreement on WW, but here's a bit more on hotels. A cafeteria is not a restaurant. Apples n oranges. Events setup: I don't see what special thing WW can do for events that hotels can't. Seasonal: hotels know they don't need to hire additional staff during low periods. They also have the option of putting rooms up on Expedia, orbits, etc, at lower temporary rates (even just for one night) to keep vacancy down. WW can't. Hotels are -really- different than WW beyond the "we rent out sho

  • that comes when a ponzi scheme collapses. A few walk off with loads of money.
    I pity the staff. Mere pawns in a scheme that seemed too good to be true and was.

  • Non core business (Score:5, Funny)

    by Njovich ( 553857 ) on Saturday November 09, 2019 @08:05AM (#59397074)

    So they will just stick to the core business of defrauding investors now?

  • Why the fuck did they have a wave pool company? Were they planning to install those in the offices too?

  • What about the kale farms? Are they going to sell those too? I don't want to lose my job!

  • This part is just there to troll the Harvard Comma people, right?

    workplace software company Teem and Wave Garden, a maker of wave pools.

    It has a long list of [line of business] [company name], and ends the list with "Teem and Wave Garden, a maker of wave pools."

  • For the sake of completeness ... (Score:4, Informative)

    by kbahey ( 102895 ) on Saturday November 09, 2019 @12:56PM (#59397464) Homepage

    Adam Neuman, the founder, was given $1.7 billion as an exit package.

    This is the same founder who charged the company $5.9 million for the tradmark "We" [cnbc.com]. Yes, that is right!

    And now he (and other company officials) are being sued [reuters.com] for the botched IPO.

  • Remember when this self-titled "president of the world" wants to actually run for office: he'll do the same thing to the voters that he has done to his former employees: keep all the cookies for himself while treating the rank and file as the disposable trash he knows they are.
  • Don't worry, folks. WeAreOne, WhenWeRise, and WeShallOverCome are already safely divested from these folks and are very respectfully used by the LGBTQ movement for many years!

    Love

    Mark Allyn
    Bellingham, Washington

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