Awaiting Layoffs, WeWork Employees Say Founder’s Payout Is ‘Graft’ – The New York Times

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

A WeWork location in Philadelphia. More than 150 of the company’s employees have signed a letter to management asking to be treated fairly in coming layoffs.Credit…Mark Makela/Reuters

In the latest sign of worker activism in tech companies and start-ups, a group of employees at the struggling office-space giant WeWork are calling on management to treat workers humanely as the company prepares to lay off thousands, and to give workers a say in corporate decisions and policies.

Alluding to the controversies that have dogged the company and its co-founder Adam Neumann, the workers said in a letter to management that they were seeking to restore values they say top executives disregarded. Under an exit package worth around $1 billion, Mr. Neumann agreed last month to give up control of WeWork.

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

WeWork leases office space, refurbishes it and then rents it out to customers. As it has expanded across the world at breakneck speed, the company’s costs have far exceeded its revenue. The company is now trying to shut down or sell noncore businesses, withdraw from unprofitable markets and cut its work force, which totaled more than 12,500 employees at the end of June.

Facing a cash crunch, WeWork secured a multibillion-dollar bailout last month from SoftBank, the Japanese conglomerate, which is its largest outside investor. Marcelo Claure, a SoftBank executive who was appointed WeWork’s executive chairman, is overseeing the restructuring. Earlier, in September, WeWork withdrew an initial public offering after investors balked at buying shares in a company with huge losses and weak corporate governance.

In their letter to management, which was delivered Tuesday, employees refer to the financial hardship many of them will soon face as a result of the restructuring and demand that those who are laid off receive severance pay, continued health benefits and compensation for devalued stock options.

More than 150 WeWork employees have signed the letter, and more than 500 have joined a channel on Slack, the corporate messaging system, that the group set up last weekend. Alan Friedman, a WeWork software engineer who helped organize the coalition, said the group included engineers, architects, customer support representatives, cleaning staff and other employees.

In a statement, a spokeswoman for the company, Erin Clark, said Mr. Claure “cares deeply about our employees and treating those who are laid off as part of the restructuring fairly, with dignity and respect.” She said he welcomed “feedback” from employees.

On Thursday evening, Mr. Claure responded to the group with an email that indicated he took their concerns seriously, but with little elaboration, and did not acknowledge the workers’ request for a meeting.

The letter also asks WeWork to be open about the fate of cleaners and other facilities employees who were recently informed that the company planned to transfer them and the work they do to an outside contractor.

The letter writers reserved particular animus for Mr. Neumann, noting that the $46 million annual consulting fee SoftBank awarded him for four years is higher than the compensation of all but a small number of public company chief executives in the United States last year.

“We are not asking for this level of graft,” the workers wrote. “We are asking to be treated with humanity and dignity so we can continue living life while searching to make a living elsewhere.”

A representative for Mr. Neumann declined to comment.

Mr. Friedman said the idea for the coalition came about in late October, as he and several fellow engineers sought to combat a feeling of powerlessness. This smaller group, known as the committee, then enlisted others through messaging apps.

In interviews, workers involved in the coalition said they had believed in the company’s mission of creating a community for office workers, only to become disillusioned by the antics of Mr. Neumann and his inner circle.

“The initial thing of ‘making a life, not a living,’ ‘community,’ ‘better together’ — the terms WeWork pushed as marketing also seeped into this company’s culture in a very real way,” said Kevin Hsieh, a software engineer involved in the group. “There is a looming sense of betrayal and frustration that that wasn’t necessarily followed everywhere.”

Mr. Friedman said his first hint that the company’s leadership might not be practicing the values it preached came at a company “summer camp” retreat in the English countryside in 2018. He recalled that most rank-and-file workers roughed it in small tents on a fairground, which became a muddy mess in the rain. Mr. Neumann stayed in a large luxury tent.

“It was like a physical manifestation of the power imbalance,” Mr. Friedman said.

He said his concerns about the discrepancy between Mr. Neumann’s words and actions were solidified in recent months, amid reports that the company had spent $60 million buying a private jet and that Mr. Neumann had bought multiple mansions.

In the letter, workers say their concerns go beyond the coming layoffs. The coalition wants more input into how the company is managed because “we’ve seen what can happen when leadership makes decisions while employees have no voice,” though it doesn’t elaborate on its preferred way of influencing management.

The group says it also wants to ensure that the company responds appropriately to accusations of sexual misconduct, increases diversity and eliminates the requirement that employees resolve claims against the company through arbitration rather than in court.

Last week, a former WeWork employee filed a complaint against the company and Mr. Neumann contending that she had been discriminated against for becoming pregnant and taking maternity leave. The complaint, filed by Medina Bardhi, who worked as Mr. Neumann’s chief of staff, said he had referred to her maternity leave as a “vacation” or “retirement.” The company has said it will defend itself against the complaint.

In their willingness to make collective demands, the workers appear to echo the actions of employees at several tech companies, including Microsoft, Amazon and Google, where 20,000 employees walked off the job last fall to protest the company’s handling of sexual harassment. After the protests, Google agreed to end forced arbitration for employee disputes.

Members of the WeWorkers Coalition say they received advice from workers at the crowdfunding site Kickstarter, who have been trying to unionize. But in line with workers at other companies, like Google, they say it may be more practical for them to engage in collective action without first trying to create a union.

Some workers in other industries have won concessions from employers facing financial distress by organizing, including workers at Toys “R” Us, which filed for bankruptcy in 2017. Two private equity funds that owned the retailer agreed last year to establish a $20 million fund for laid-off employees.

At a meeting with employees in Manhattan last month, Mr. Claure, the SoftBank executive overseeing WeWork, said he would focus on profits over growth.

On Friday, WeWork released a presentation about how its business is doing. Locations open more than two years had an operating profit margin of 21 percent for the first six months of the year, excluding certain expenses. But many of its locations had been open for less than a year, and those were barely profitable or losing money.

The company also confirmed its plans to get out of some businesses and lay off workers, without saying how many.

The WeWorkers Coalition has seized on the treatment of the company’s cleaning staff as an example of how the company’s actions have diverged from its idealistic rhetoric.

In an email to staff members last Friday, a WeWork executive said workers whose jobs were moved to an outside company would have the same level of pay and comparable benefits as they do now. The announcement has unnerved employees who fear they will eventually be laid off, lose benefits or be forced to work different schedules, according to an interview with one of the affected workers and screenshots of Slack messages reviewed by The New York Times.

Mr. Hsieh said that, for many employees, the fact that even the cleaners received equity showed that WeWork had “great values.” But the decision to outsource the cleaning staff, he said, showed how hollow that commitment was.

WeWork has a history of disputes with its cleaning staff, who clashed with Mr. Neumann over pay and other issues in 2015.

It’s unclear how many cleaners would be affected by the new outsourcing arrangement. On the East Coast, many of those workers are already employed by an outside company.