- WeWork is planning to outsource its US and Canadian cleaning and facilities staff, per an employee memo reviewed by Business Insider. It’s a reversal of co-CEO Artie Minson’s 2015 decision to cut WeWork’s outsourcing contracts.
- The staffing changes, which will be announced this coming week, come as WeWork looks to cut costs in a number of areas following a bailout from SoftBank. Major layoffs are coming, and executives are selling non-core businesses and winding down projects like elementary school WeGrow.
- Employees had emailed new WeWork chairman Marcelo Claure earlier on Friday asking him to “prioritise the wellbeing” of cleaning and maintenance staff as the company slashes costs.
- For more stories about WeWork, click here.
WeWork plans to outsource cleaning and facilities staff for US and Canada locations, according to emails sent to employees on Friday.
The staff shift, which will be announced this coming week, per a memo sent at 5:30 p.m. ET, comes as the office company looks to cut costs in a number of areas following a bailout from SoftBank. Major layoffs are coming, and executives are selling non-core businesses and winding down projects like elementary school WeGrow.
A spokeswoman for WeWork declined to comment.
Arik Benzino, the US, Canada, and Israel “CWeO” – WeWork’s title for country manager – told cleaning and facilities employees in a Friday email that WeWork has been looking at outsourcing for nearly a year.
“We’re undertaking it because we believe it will fundamentally improve the experience of our team and our members,” he said in the email.
Benzino noted that every current cleaning and facilities employee will be offered a job with WeWork’s new partners, with pay, building assignment, and shifts staying the same. He also said benefits will be comparable.
One current employee who is not authorised to speak to media called the shift an “internal shitshow … predictable yet still destabilizing,” noting that there seemed to be no response plan. Another message was sent to US and Canada community teams to inform them of the original note, asking the teams to reiterate that everyone will be offered a job with the new partners.
Earlier on Friday, WeWork employees emailed new chairman Marcelo Claure, asking him to “prioritise the wellbeing” of community service associates and building community associates, “clearly communicate whether [cleaners’] jobs at WeWork are at risk, and that you communicate a fair commitment to release layoff decisions by a reasonable date.”
The email also noted that cleaners “constitute one of WeWork’s most vulnerable employee groups” and many “lack a safety net.”
‘This company is going very far’
WeWork has a tumultuous history with cleaning staff. In 2015, cleaners tried to unionize, leading one outsourcing partner to cancel its contract. The office company hired most, but not all, of the outsourced employees to come in-house as part of a larger move to make cleaning staff employees.
The New York Times reported at the time that about 100 people lost their jobs. Cleaners protested outside of WeWork’s New York headquarters, and cofounder Adam Neumann pleaded directly with them.
“This company is going very far,” Neumann said, per the Times. “The stock, God willing, is very valuable.”
Then-chief operating officer Artie Minson, who’s now co-CEO, made the decision to cut the outsourcing contract and bring cleaners in-house.
“We were a five-star brand with one-star cleaning,” Minson had told the Times, highlighting how the cleaners would play a role in extending WeWork’s ethos to every part of the business.
That brand play cost WeWork significantly. Minson said employees made $US15-18 per hour, plus “benefits, sick days, and a small amount of stock.” In-house cleaners cost about twice as much as WeWork paid the outsourcing provider.
Cleaners’ roles sometimes went beyond tidying up after WeWork tenants and staff. Neumann liked to recount a story to employees when he and other executives stayed up all night drinking and breaking office windows, multiple people told Business Insider for a feature about what it was like to work at WeWork.
It stuck one employee in the audience as juvenile: “You’re not rock stars – you left that mess for people to clean up. They thought they were so cool and they were so badass. It was really unprofessional.”
Neumann’s representative had acknowledged the broken windows, describing it as an accident. “We wanted it cleaned up by morning so that nobody would get hurt by the broken glass,” the spokeswoman said.
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