WeWork, the ailing office-sharing giant that until recently was the, said Thursday that it will lay off 2,400 employees, or nearly 20% of its workforce. The company said the cuts started a few weeks ago in overseas offices, but that U.S. layoffs only started this week.
The layoffs, though expected, confirms the dramatic downturn for WeWork, which earlier this year was planning to sell shares in a highly anticipated initial public offering.
The IPO was abruptly called off after the company revealed that its losses were much bigger than projected, and troubling details emerged around some of the real estate and investment deals that had been struck under the leadership of then-CEO Adam Neumann.
Anby CBS MoneyWatch showed WeWork was on track to run out of money by February. A by its biggest investor, Japanese venture capital firm Softbank, led to Neumann's ouster in September.
Since then, WeWork has told investors it plans to refocus its business on its core office-sharing business and away from some other ventures that have been launched by Neumann, including a pre-school and co-living residential offering.
In a statement, a WeWork spokesperson called the layoffs "necessary" in order to "create a more efficient organization." The company did not specify how many workers are being dismissed in the U.S. alone.
The company said its former employees will receive severance and continued benefits and job transition assistance. "These are incredibly talented professionals, and we are grateful for the important roles they have played in building WeWork over the last decade," the company said.