{"id":11409,"date":"2019-11-21T18:31:48","date_gmt":"2019-11-21T23:31:48","guid":{"rendered":"https:\/\/www.renthop.com\/content-manager\/?p=11409"},"modified":"2019-11-21T18:32:40","modified_gmt":"2019-11-21T23:32:40","slug":"is-wework-default-dead-or-default-alive","status":"publish","type":"post","link":"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/","title":{"rendered":"Is WeWork Default Dead or Default Alive?"},"content":{"rendered":"\r\n<p>Previously we talked about How Not To Die as a <a href=\"https:\/\/www.renthop.com\/blog\/2019\/11\/how-not-to-die-agents-and-brokers-edition\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">real estate agent<\/a>. Another infamous Paul Graham term is &#8220;<a href=\"http:\/\/paulgraham.com\/aord.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Default Alive or Default Dead (opens in a new tab)\">Default Alive or Default Dead<\/a>&#8220;. It sounds extremely harsh and morbid, but that&#8217;s part of the point. Calling a company Default Dead should trigger some alarm bells.<\/p>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/www.cnbc.com\/2019\/11\/21\/wework-lays-off-2400-employees.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"WeWork today announced layoffs (opens in a new tab)\">WeWork today announced layoffs<\/a>, cutting 2400 jobs in an attempt to stabilize the company and reach sustainability. Lets do some back-of-the-envelope math to see whether WeWork is likely Default Alive.<\/p>\r\n\r\n\r\n\r\n<p>According to Glassdoor, they will save an average of $69K per community manager and $120K per software engineer. Most of the layoffs are probably community manager types, but we can be generous. Assume a high $150K average fully loaded cost of each employee, given all the expensive benefits (and ironically, co-working space).<\/p>\r\n\r\n<p>\u00a0<br \/><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-10401\" src=\"https:\/\/www.renthop.com\/content-manager\/wp-content\/uploads\/2019\/11\/image-2.png\" alt=\"\" width=\"675\" height=\"327\" \/><br \/>\u00a0<\/p>\r\n\r\n<p>From the <a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1533523\/000119312519220499\/d781982ds1.htm\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"infamous S-1 filing (opens in a new tab)\">infamous S-1 filing<\/a> prior to the failed IPO, WeWork was on track to make $3.0 Billion in revenues for 2019. Unfortunately, it seems WeWork is still Default Dead. Operating expenses are at least $3.8 Billion, even if we immediately exclude pre-opening, &#8220;growth and new market development&#8221;, and depreciation expenses. Operationally they are still $800M in the hole, with the job cuts saving at best $360M less severance, pre-committed leases, and lawsuits.<\/p>\r\n\r\n<p>\u00a0<br \/><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-10401\" src=\"https:\/\/www.renthop.com\/content-manager\/wp-content\/uploads\/2019\/11\/wework_fin.jpg\" alt=\"\" width=\"675\" height=\"327\" \/><br \/>\u00a0<\/p>\r\n\r\n<p>To be Default Alive, the cuts need to be more than twice as large, or expect to grow gross profits by at least 15% with the remaining staff and resources.<\/p>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Previously we talked about How Not To Die as a real estate agent. Another infamous Paul Graham term is &#8220;Default Alive or Default Dead&#8220;. It sounds extremely harsh and morbid, but that&#8217;s part of the point. Calling a company Default Dead should trigger some alarm bells. WeWork today announced layoffs, cutting 2400 jobs in an [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":11441,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"yes","_lmt_disable":"no","footnotes":""},"categories":[153],"tags":[],"class_list":{"0":"post-11409","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v23.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is WeWork Default Dead or Default Alive? - Real Estate Topics, Tips, and Guides<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is WeWork Default Dead or Default Alive?\" \/>\n<meta property=\"og:description\" content=\"Previously we talked about How Not To Die as a real estate agent. Another infamous Paul Graham term is &#8220;Default Alive or Default Dead&#8220;. It sounds extremely harsh and morbid, but that&#8217;s part of the point. Calling a company Default Dead should trigger some alarm bells. WeWork today announced layoffs, cutting 2400 jobs in an [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\" \/>\n<meta property=\"og:site_name\" content=\"Real Estate Topics, Tips, and Guides\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/renthopapartments\" \/>\n<meta property=\"article:published_time\" content=\"2019-11-21T23:31:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-21T23:32:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.renthop.com\/blog\/wp-content\/uploads\/2019\/11\/wework.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Lee Lin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@renthop\" \/>\n<meta name=\"twitter:site\" content=\"@renthop\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Lee Lin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\"},\"author\":{\"name\":\"Lee Lin\",\"@id\":\"https:\/\/www.renthop.com\/blog\/#\/schema\/person\/5877a1d4b27a98e84d9840c6aea99af7\"},\"headline\":\"Is WeWork Default Dead or Default Alive?\",\"datePublished\":\"2019-11-21T23:31:48+00:00\",\"dateModified\":\"2019-11-21T23:32:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\"},\"wordCount\":234,\"publisher\":{\"@id\":\"https:\/\/www.renthop.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.renthop.com\/blog\/wp-content\/uploads\/2019\/11\/wework.png\",\"articleSection\":[\"Entrepreneurship\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\",\"url\":\"https:\/\/www.renthop.com\/blog\/is-wework-default-dead-or-default-alive\/\",\"name\":\"Is WeWork Default Dead or Default Alive? 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