NEW DELHI: Co-working major WeWork India, owned by realty firm Embassy Group, will lay off around 20 per cent of its total 500 employees with effect from June to cut its operational costs after its business hit by the coronavirus outbreak.
Karan Virwani, the CEO of WeWork India, informed this decision through internal communication to company employees. Around 100 workers would be affected by the decision, according to a report by a news agency.
WeWork India says it will honour the notice period and also offer severance packages to its employees. The company will continue medical insurance until the end of this year and also offer its coworking centres free of cost for two months in their lifetime.
"We will be restructuring to create a leaner, more efficient organization that is better able to serve our members. This decision has led us to reduce approximately 20 per cent of our workforce across functions and roles," Virwani said in the letter.
WeWork India has over 57,000 desks in 34 locations across NCR, Mumbai, Bengaluru, Pune and Hyderabad. The seats are available in the range of Rs 5,000-40,000 per desk per month.
Bengaluru-based Embassy Group, a major player in Indian commercial real estate that launched India's first REIT, had partnered US-based WeWork in 2016 to enter into co-working business.
The coworking segment, which grew at a rapid pace in India in the last few years, has been badly impacted because of lockdown to control coronavirus disease. Coworking players take office space on lease from real estate developers and other landlords and then subleases that to corporates, freelancers and startups.
It is not just WeWork, but several other start-up players have also decided to lay-off their staffs amid the novel coronavirus induced lockdown.
Online food delivery platform Swiggy on Monday said it would lay off 1,100 employees over the next few days due to the impact of COVID-19 on business. Its rival, Zomato earlier this week, announced the reduction of its workforce by 13 per cent, while implementing a temporary pay cut of up to 50 per cent for the remaining employees.
In the travel segment, Uber Technologies Inc said on Monday that it would cut an additional 3,000 jobs as coronavirus-led restrictions sapped demand for ride-hailing services. Uber had already cut 3,700 jobs earlier this month as its revenue dropped 80 per cent globally in April.