What WeWork is giving laid-off employees who aren’t named Adam Neumann(vox.com)
vox.com
What WeWork is giving laid-off employees who aren’t named Adam Neumann
https://www.vox.com/recode/2019/11/7/20953930/wework-adam-neumann-severance-laid-off-employees-layoffs-buyout-unicorn-ipo
47 comments
Getting 4 months severance is not getting shafted.
this is an underrated comment.
I've been through layoff(s); 1-2 months is pretty standard.
I've been through layoff(s); 1-2 months is pretty standard.
Were you prohibited from working for a competitor for twelve months after the layoff?
Such restrictions are largely unenforceable in California
Some people are known to live and work outside of California.
I don't believe that matters. The comparisons are not equal, even if it's potentially unenforceable.
I would agree, except for the apparent extension of the noncompete beyond the severance period. It really doesn’t seem appropriate to me, especially given how many fields We was in.
It is when the boss walks away from the same wreckage with a big enough payout to make all those severance payments out of his own pocket.
If they got 6 months it wouldn't make what Adam got less absurd.
Also the can not sue clause, is industry standard thought-out.. While Adam sounds like serious a piece of work, why on earth should a employee get the same package as the CEO?! 4 months is above and beyond..
I disagree, especially when compared to a self-dealing, unethical, borderline fraudulent CEO getting $1.7bn. There's no good reason for him to have received a penny, and if the board/VCs were okay with parting with $1.7bn, it should have been distributed to the employees who weren't involved in his shenanigans.
Layoff with 4 months is a great deal at any company.
What Adam did is an entirely separate issue, and not comparable to the average employee. And it was really one main investor who controlled everything and had to part with the money, and not because they wanted to but because that was the price to get rid of Adam's control.
What Adam did is an entirely separate issue, and not comparable to the average employee. And it was really one main investor who controlled everything and had to part with the money, and not because they wanted to but because that was the price to get rid of Adam's control.
WeWork is likely worth closer to $0 than $8-10 billion (not just my opinion, Bill Ackman [1] is onboard with that valuation of both the equity and the debt). If SoftBank had a spine, they would've paid out reasonable severance to rank and file (which they have to do regardless), shown Neumann the door (and burn his equity down with no consulting fee to help pay off his credit lines to JPMorgan Chase, UBS Group and Credit Suisse Group), and spun the company down. You don't need to pay a fraud for control of a worthless company.
[1] https://www.telegraph.co.uk/technology/2019/10/30/wework-cou...
[1] https://www.telegraph.co.uk/technology/2019/10/30/wework-cou...
Well the severance is handled. As for the rest, what would shutting it down accomplish?
Technically they haven't taken anything from anyone since they never went public so it's just an expensive portfolio company for Softbank and the other investors. If they feel they can turn it around then why not? Meanwhile all those people continue to have jobs.
Technically they haven't taken anything from anyone since they never went public so it's just an expensive portfolio company for Softbank and the other investors. If they feel they can turn it around then why not? Meanwhile all those people continue to have jobs.
Yes and no. Without saying too much, I’ll say that you might be lacking information about the nature of the contracts that need to be signed and other internal dealings. Remember, this is coming from a Meetup employee. They were acquired and you don’t have all the information about what they might have gained/lost in that acquisition.
I’m not making any judgement calls here. However, I would caution jumping to any conclusions.
I’m not making any judgement calls here. However, I would caution jumping to any conclusions.
Laying off employees and expecting them to sign non-competes for a month of severance (since they are required by WARN to provide 3 of the 4 months) feels very miserly and in bad faith. Why the non-compete?
Why any non-compete at all ever? Why is this case special?
I thought WARN was 60 days.
https://www.doleta.gov/programs/factsht/WARN_Fact_Sheet_upda...
https://www.doleta.gov/programs/factsht/WARN_Fact_Sheet_upda...
The article states:
>Under New York State WARN act labor regulations, employees are promised 90 days of paid notice or leave if they are laid off en masse.
>Under New York State WARN act labor regulations, employees are promised 90 days of paid notice or leave if they are laid off en masse.
I think if you are a worker, it makes more sense to be at a big tech company. I've been in Silicon Valley a while now, and I feel like something has changed where the benefits have tilted away from startups. Greed is out of control, there is too much money and I'm afraid it's not being invested wisely or spent wisely.
Once ordinary con men figured out that boundless optimism is all it takes to get money, that's all many companies had.
I think Neumann's package, especially the $185 million "consulting fee", was particularly disgusting and outrageous.
That said, I think 4 months of severance is quite generous, so not sure what these folks are complaining about.
That said, I think 4 months of severance is quite generous, so not sure what these folks are complaining about.
That severance is way above the market rate of nothing
To be clear, his package was to relinquish control of the company. It’s not like he was laid off. He had tremendous leverage and used it.
It’s really shitty that people are being laid off. With four months and a still-booming job market, hopefully they’ll find somewhere quickly with a short break in between to reset.
It’s really shitty that people are being laid off. With four months and a still-booming job market, hopefully they’ll find somewhere quickly with a short break in between to reset.
From what I thought employees took part in the Ponzi as well...they thought (and the HR helped them thinking) that the public market will take the bs of Adam, and they can sell their shares.
>>I think Neumann's package, especially the $185 million "consulting fee", was particularly disgusting and outrageous.
why? It's not like he took it from you or me. Softbank bet on him and lost. Oh well.
why? It's not like he took it from you or me. Softbank bet on him and lost. Oh well.
How exactly is it that no one seems to have a legal case against Neumann? I have a hard time to believe that one can mess with investor's money so blatantly and get away with one of if not the largest payout ever.
it's not fraud if the investors knew what he was doing and were ok with it.
That has rarely stopped investor lawsuits in the past.
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I wish I could be surprised by stuff like this. Feels like this stuff is the norm, not the exception. Unfortunately, I don't see how this is going to change anytime soon.
There is a capital class and there is a non-capital class
The only difference between now and feudal society is that the peasants knew it
The only difference between now and feudal society is that the peasants knew it
Except back then you couldn't actually move up. Most people today can save and generate wealth from leveraged capital today. That's literally every startup.
There are numerous avenues of social mobility today and chronic structural issues with each and every one of them today
I wasn’t going to write a dissertation to make my point
I wasn’t going to write a dissertation to make my point
Yet you decided to compare with feudal society...
I would do it again.
Would you prefer I replace “only difference” with “similarity” or “analogy”? So then I can just say metaphors compare dissimilar things that share at least one common attribute. The point itself would be the exact same and also skirt right by the most pedantic rebuttals.
The peasants were aware of their place in society, the non-capital class has cognitive dissonance their whole lives.
Would you prefer I replace “only difference” with “similarity” or “analogy”? So then I can just say metaphors compare dissimilar things that share at least one common attribute. The point itself would be the exact same and also skirt right by the most pedantic rebuttals.
The peasants were aware of their place in society, the non-capital class has cognitive dissonance their whole lives.
That"s the dream being sold, which everybody buys.
In practical terms, social mobility is very low.
In practical terms, social mobility is very low.
When you join a startup as a normal employee, the vast majority of the upside goes not to you but to the founders and investors. Assume they make at least 100x what you will, or more like 1000x. So if you get a $100k payout in a very good exit as a normal employee in a startup, likely the founders made at least $10mil.
So none of this is surprising except the startup crashed so spectacularly.
So none of this is surprising except the startup crashed so spectacularly.
Non-competes have no legal standing in several states (like California). It's odd to tie them to severance.
Then they shouldn't be included in the first place. If the company enforces it, they don't become any less of the asshole just because you can get away with it.
That was my point. It's a strange decision to do so considering all the bad PR already.
People who way this have never had to fight one. I've been to court 3 times to get out of "unenforceable" non competes. The contract may be empty, the legal Bills are not.
It would be immediately thrown out unless there are other factors (like if you signed under a different state's law) but it's no different than a company filing any frivolous civil suit against you.
It costs money for both sides, but that cost usually deters the enforcement too unless you're really about to start a major direct competitor. I don't see WeWork doing that.
It costs money for both sides, but that cost usually deters the enforcement too unless you're really about to start a major direct competitor. I don't see WeWork doing that.
In California? My understanding is that even attempting to enforce on opens the employer up to an unfair competition lawsuit.
WeWork is headquartered in New York, where non-competes are enforceable (albeit with limitations, but still, it's not like in CA...)
Tl;Dr 4 months severance
But we are supposed to be mad that the largest and founding equity holder got money for his equity commiserate with the market value that another equity holder requires so they dont get bonesawed by their own limited partners
But we are supposed to be mad that the largest and founding equity holder got money for his equity commiserate with the market value that another equity holder requires so they dont get bonesawed by their own limited partners