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- WeWork chairman Marcelo Claure said in a Thursday night memo to staff obtained by Business Insider that 13 employees were fired for abusing its vendor selection and management processes.
- Claure is drawing a clear line between how WeWork operated in the past and its future under SoftBank, emphasizing that he’s building “a strong culture of compliance.”
- He also said layoffs will be finished in the next several weeks.
- For more stories about WeWork, click here.
WeWork chairman Marcelo Claure told staff in a memo sent Thursday evening that the company had fired 13 employees after investigating policy abuse.
In the memo, Claure said employees from two regions – Latin America as well as US, Canada, and Israel, which the company groups together – were terminated for abusing “vendor selection and management processes.”
“When we hear about an issue, you have my commitment that we will investigate it and act on our findings,” he wrote. “We corrected these wrongs immediately after we heard the complaint and investigated the incidents … We know we can build a strong culture of compliance only if you can come forward with concerns, as our colleagues recently did.”
Claure also said layoffs would be finished in several weeks. The office company expects to cut up to 25% of its workforce as it focuses on a path to profitability. On Thursday, WeWork’s coding bootcamp Flatiron School laid off dozens of employees, Business Insider reported.
A WeWork representative declined further comment.
“Respect at its core”
WeWork has had past issues with employees and vendors, at least one of which led to a lawsuit.
On Thursday, Business Insider reported that the company’s IT is due for a big overhaul. At WeWork’s start, IT was led by a 16-year-old who dropped out of high school to join the company. WeWork later sued him, alleging fraudulent misrepresentation and other claims in a case the parties ultimately agreed to dismiss.
In Thursday’s memo, Claure seemed to be distancing the company from its culture under cofounder Adam Neumann, who was ousted in late September.
“We are a culture that believes in making the impossible possible” he wrote. “I want that culture to continue, but always with integrity and respect — respect for the law, our policies and, most importantly, each other.”
Under Neumann, WeWork grew from an idea to 528 locations and 12,000 employees in nine years. The company also struggled with governance issues and a web of conflicts of interest laid out in a mid-August filing to go public. Investor and media scrutiny of those problems and Neumann’s responsibility ultimately led WeWork’s board to oust Neumann, name two co-CEOs, and bring in Claure.
Now, the new leadership is looking to streamline its business and cut non-core businesses.
The company said last month that its private elementary school, WeGrow, would close its doors at the end of the school year. Other companies under The We Company banner, such as its living space WeLive, have canceled planned projects in response to the turmoil.
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