Via Financial Times

WeWork employees have formed a group to campaign for better severance pay, employment conditions and an end to “deception, exclusion and selfishness at the company’s highest levels” following the turmoil of its failed IPO process. 

The WeWorkers Coalition announced its existence on Friday with a letter to management setting out demands including for sexual assault claims to be “taken seriously” and for thousands of employees about to lose their jobs to receive “fair and reasonable separation terms”. 

Thousands of us will be laid off in the upcoming weeks. But we want our time here to have meant something,” the group said in its letter. 

“We don’t want to be defined by the scandals, the corruption and the greed exhibited by the company’s leadership. We want to leave behind a legacy that represents the true character and intentions of WeWork employees.” 

The US-based serviced office provider has been in turmoil since an aborted IPO process this summer left it close to a cash crunch and saw its valuation plummet from $47bn to $8bn, resulting in the resignation of its chief executive Adam Neumann

A rescue by WeWork’s largest investor, Japan’s SoftBank, was agreed last month and is expected to be followed by about 4,000 of the 14,000 people who work for WeWork and its joint ventures being laid off or seeing their jobs outsourced. 

Marcelo Claure, the SoftBank executive who became WeWork’s chairman last week, told staff on Thursday that WeWork’s priority was to treat those it was laying off “with dignity and respect, including fair severance packages and continuation of benefits that allow them to transition to the next phase of their journey”.

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He added, however, that the job cuts and sales of acquired businesses from group activity arranger Meetup to a wave machine company were needed to create a cost structure that would let WeWork grow “without needing to raise more capital” — a striking shift for a company that has raised $18.5bn in debt and equity while consistently losing money.

Details emerged on Friday of how WeWork’s spending accelerated in the third quarter, before its hopes of going public were dashed. It added a record 108,000 desks in the period, up 119 per cent year on year, more than doubling its annualised revenue run-rate to $4.1bn but pushing occupancy down to 80 per cent from 83 per cent a quarter earlier.

A report from commercial property group CBRE this week showed that WeWork accounted for almost 70 per cent of all the new flexible office leasing activity in the US in the third quarter.

Alan Friedman, a New York-based software engineer at WeWork who is helping to organise the WeWorkers Coalition, said 185 people had signed the letter to management, while at least 600 expressed an interest in joining ahead of the group publicising its launch this week. 

The group pointed at the package worth close to $1.7bn Mr Neumann received on his departure and added: “We are not asking for this level of graft. We are asking to be treated with humanity and dignity.” 

The coalition asked for cleaning and maintenance staff to receive “full benefits and fair pay”, for salary transparency to address “systemic inequalities” and for an end to forced arbitration clauses in contracts, which limit employees’ recourse to legal action. 

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Sexual misconduct and assault claims should be “taken seriously, acted on immediately and resolved with transparency”, the coalition said. 

Mr Friedman said management had acknowledged receipt of the letter but had not responded to a request for a meeting. “It’s not what we were hoping for,” he said.

WeWork said: “Executive chairman Marcelo Claure cares deeply about our employees and treating those who are laid off as part of the restructuring fairly . . . Marcelo is in regular, direct conversation with employees across the organisation to understand their views.” 

The WeWorkers Coalition said it aimed to represent employees internationally but had no immediate plans to seek formal recognition as a union. It is being advised by Hope Pordy, an employment lawyer at Spivak Lipton. 

Organisers have also spoken informally to contacts at the crowdfunding group Kickstarter, where staff have been pushing to form a union in the face of resistance from management.

Mr Claure’s letter separately disclosed that WeWork had recently fired 13 employees after “complaints of abuse of our vendor selection and management processes”. The company declined to provide further details.