WeWork offered about 1,000 people a surprisingly good deal to move to a contractor then sent some of them a letter with another deal

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WeWork offered about 1,000 people a surprisingly good deal to move to a contractor then sent some of them a letter with another deal

Category : entrepreneur

  • In addition to cutting 2,400 jobs last week, WeWork is also moving roughly 1,000 people on its janitorial and facilities staff off its payrolls by sending them to contract companies.
  • Business Insider has learned the details of the job offers that cleaning staff received.
  • The offer retains their current salary, seniority, includes benefits. But workers are still concerned about job security.
  • Then, on Friday, WeWork sent a letter to some of these employees that work at select buildings and offered them a different deal: stay on the payroll until the end of February without coming into work.
  • For more stories about WeWork, click here. 

In addition to cutting 2,400 jobs last week, WeWork is also moving roughly 1,000 people on its janitorial and facilities staff off its payrolls by sending them to contract companies like JLL, Unity, and ABM, sources tell Business Insider.

Business Insider has learned more details about this offer, including who got it, who didn’t, and the reasonably good terms these contractor companies offered WeWork employees.

We’ve also learned about a last minute letter WeWork sent to some of these employees telling them they could skip the new job offer and instead take a layoff package that would keep them on the payroll, without coming into work, until late February.

Not a perfect deal — but offer letters matched salaries and seniority

Multiple sources said that the new offer letters matched employees’ WeWork salaries and kept their seniority intact. After questions from CNN about how WeWork would treat its year-end 401K match — it required employment at year’s end — the company also committed to issue a lump sum equivalent to the 401K match. It did not give that same offer to the 2,400 people it laid off in November, sources say.

The contract worker deal wasn’t perfect. They were not guaranteed that they would be working at the same building locations or shifts, or informed if they would be moved to supporting companies other than WeWork, sources said.

Workers are also worried about job security, people familiar with the deal said. Once they transferred, workers worried that their new company could lay them off and replace them with lower-wage workers.

Even so, this was a better deal than other employees in similar situations had faced. Back in 2015, when Hewlett Packard was in the process of massive, multi-year layoffs, it shifted some employees to a contract company and employees were offered less money, fewer benefits and lost their seniority, employees told us at the time, and, like the WeWork offer, employees were told if they turned down the new job, they wouldn’t qualify for severance.

WeWork employees who took the new job will begin December 9. 

Some workers in New York also got an Option B

Then, on Friday at about 6 p.m., after work hours, some employees who worked at 16 of WeWork’s 65 buildings in New York got another letter.

The letter was posted by employee activist group WeWorkers Coalition, a group of about 200 WeWork employees  representing employees’ interests. 

The letter told people who work at these buildings that they could refuse the new job offer and instead take a similar deal to what laid-off employees were getting.

Under the New York WARN act, that covers how companies can conduct large-scale layoffs, employees must be given 90-days notice. So employees who refused the new job offer would stay on payroll through February, 20, 2020, but “shall not report to work” for 90 days the letter said, unless their manager specifically asked them to.

Like other laid off employees, who would also remain on the payroll for 90 days, should these workers find a new job in that time, then they would stop being paid by WeWork.

Employees had until November 25, Monday, to take this other deal, the letter implied, so essentially, one business day.

But the letter did not give them instructions as to how take the layoff offer, and it only went to people who worked in select buildings, sources confirmed.  One person said that this was tied to the WARN act, which only applies to workers in locations with more than 50 employees.

So workers at buildings with fewer employees did not get the letter.

Likewise, not every janitorial and facilities employee got a contract job offer at all. Multiple sources tell us that the contract offer was primarily directed at workers while managers were laid off, including long-term employees. Business Insider confirmed that at least one manager who had worked at the company for over seven years was let go.

As odd as this, last-minute, late-night offer was, overall the sources we talked said that the janitorial staff ” are getting a fair shake” and many “are happy they still have a job.”

It was, however, a reversal of a 2015 decision by then COO and current co-CEO Artie Minson to bring cleaning staff in-house, after staff protested low pay and benefits and started talking with a union.

Are you an insider with insight to share? Contact Julie Bort on encrypted chat app Signal at (970) 430-6112 using a non-work phone (no PR inquiries, please), or email at Open DMs on Twitter, too, @Julie188.  

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About Author

Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below!

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