Shared working space operator WeWork’s Korean subsidiary has offered its employees a voluntary retirement last week as part of its restructuring plan, sources with knowledge about the matter told The Korea Herald on Thursday.
“The voluntary retirement scheme was offered to the entire staff last week,” said a source on condition of anonymity.
The scheme is in line with WeWork headquarters’ bid “to shut down the Korean operations,” another source told The Korea Herald. Its Korean entity has been locking horns with the head office’s demand that it would retain its business by ditching profit-losing branches, the source said.
A WeWork Korea spokesperson declined to comment on its voluntary retirement plan, but denied that it was considering a shutdown of its Korean operation.
Earlier in June, the global space-as-a-service platform provider that fell from grace replaced Turochas “T” Fuad with real estate veteran Samit Chopra as the new Pacific Managing Director to oversee Korea, Southeast Asia and Australia.
WeWork currently operates 20 locations across Korea in two cities -- Seoul and Busan. As part of its restructuring plan across the Asia-Pacific region, WeWork Korea has worked with Jones Lang LaSalle to gauge profitability of each location. The head office renegotiating for Jongno Tower, central Seoul, as part of its effort to improve profitability of the location, according to WeWork Korea.
WeWork’s Korean operations started to go through a downsizing last year as it laid off some 2,400 employees globally, out of 12,500 as of June 2019.
WeWork Korea employed some 150 staff as of end-2018, according to the latest figure by NICE Information Service.
The company is facing an uphill battle as it is reeling from a financial scandal surrounding ousted CEO Adam Neumann last year. The coronavirus impact has hit hard the shared space operator, as the virus pandemic effectively shut down networking events, encouraged tenants not to extend their contracts due to stay-at-home policies and hindered access to its global network of locations.
WeWork Korea said it is on the path to stabilize the operation here as it managed to address its monthslong leadership vacuum in April.
Korea is home to coworking rivals, including homegrown FastFive and Sparkplus, among others.
By Son Ji-hyoung (firstname.lastname@example.org)