Co-working startup WeWork is cutting 7% of its staff and placing a temporary freeze on hiring as soon as next week.
The company, which rents out desks and office space, said it was laying off about 70 of its 1,000 employees as part of a “talent review process to ensure that we have the right teams in place that align with the company’s priorities.”
“WeWork’s growth and expansion continues to accelerate and we expect to add hundreds of employees between now and the end of the year,” the company said in a news release.
But Inc. suggested the cuts reflect growth pains and other challenges at WeWork.
“On the surface, it sounds like the unfortunate and common outcome of a startup growing too big too fast in a frothy market,” Inc. said. “Although some industry watchers see something bigger going on: WeWork might be starting to suffer from a real estate bubble that it — and its competitors — helped to create.”
As Business Insider reports, WeWork “has built a $16 billion business by renting out desks and office space, while creating a community and providing all the amenities, from printers to beer taps on every floor.”
The company is also expanding to shared residential spaces, recently launching recently launched WeLive, with locations in New York City and outside Washington, D.C.
“Its decision to trim staff and pause hiring — even if momentarily — comes at a time when startup funding is harder to come by and companies are tinkering with their business models,” Business Insider noted.
WeWork recently raised $430 million in a funding round that reportedly valued it at $16 billion. “Even if the dismissals don’t necessarily signal WeWork is shrinking as a company, the change seems reflective of anxieties felt throughout the startup world,” Inc. said.
Jawbone and Snapchat are among several other unicorn startups that have downsized in the past year.