WeWork, it seems, is in a bit of a Catch-22.
With money running short after a failed initial public offering, WeWork has been planning on laying off thousands of employees. There's only one problem: It's so short on cash that it doesn't have enough money to pay severance to affected workers, according to The Wall Street Journal's Liz Hoffman and Maureen Farrell.
So, WeWork, which is believed to be in danger of running out of cash within a month without new financing, has postponed the layoffs, The Journal reported Monday.
A WeWork representative did not respond to an email seeking comment.
The delay could be temporary. WeWork's board is expected to meet Tuesday to consider new funding offers from SoftBank and JPMorgan. Both deals would involve propping up the struggling company with billions of new dollars in additional cash.
WeWork's new co-CEOs told employees in an email last week that the company planned to lay off workers in coming weeks.
Read this: SoftBank is reportedly paying WeWork founder Adam Neumann $1.7 billion to step off the board
As reports of imminent layoffs have swirled, severance packages have been a hot topic of conversation inside WeWork. Workers have peppered management with questions around it recently and have focused particularly on what will happen with their outstanding shares in the company, one person familiar with the matter told Business Insider. Employees have also been asking whether their severance package will take into account any stock they are owed.
Many employees were paid partially in shares. Others received WeWork shares when the company acquired their startups. In many cases the shares they received carried a much higher value then than they do now.
SoftBank valued WeWork at $47 billion in a funding round in January. The reported bailouts proposed by it and JPMorgan would place the company's value at $8 billion or less.
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- Read more about WeWork:
- WeWork says it has 527,000 'memberships,' but that's not as straightforward as it seems
- WeWork used massive discounts — in some cases, essentially giving away space for 2 years — to try to poach customers from rivals
- WeWork could face a cash crunch as soon as February. Industry watchers think SoftBank, its lenders, and the entire industry has too much at stake to let it go under.
- Even after ousting Adam Neumann as CEO, WeWork could still go public this year — if it prices its IPO low enough
