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WeWork recently laid off its first round of employees after the coworking company’s recent implosion — and some former staffers are unhappy with the severance packages they’re being offered.

Recode obtained a severance package that was extended to a recently laid-off employee of Meetup, an app for in-person social events that WeWork acquired. On Monday, Meetup laid off 25 percent of its workforce, or about 50 employees, according to a source. Today, another WeWork-owned company, the coding bootcamp Flatiron School, also laid off dozens of employees.

Meetup is one of several companies WeWork acquired in the past few years that is reportedly up for sale.

The severance offer Recode reviewed (which may not apply to all terminated employees) provides three months of “garden leave” — in which an employee remains on the payroll with benefits but stops working — as well as one month of severance pay.

While four months of pay might sound pretty generous, it’s in stark contrast to the $1.7 billion golden parachute investors handed to WeWork founder and former CEO Adam Neumann. The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.

As anxious WeWork employees await larger cuts of up to 4,000 jobs in total, this first round of layoffs is raising questions among an already upset staff about whether WeWork rank and file should be getting a better deal, particularly when Neumann walked away with an unprecedented sum for a CEO who brought his company from record heights to near financial ruin.

“WeWork is happy to cash out Adam’s equity and give him a big check, but employees like me that need that cash aren’t getting any value for our equity,” said one former Meetup employee who spoke on the condition of anonymity.

After numerous reports of financial mismanagement and erratic behavior, Neumann stepped down as CEO and later gave up his board seat at WeWork in exchange for a package payout from the company’s largest investor, SoftBank. That included a sale of $1 billion worth of Neumann’s shares, a $500 million loan, and nearly $200 million in “consulting fees.”

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...$1.7 billion golden parachute investors handed to WeWork founder and former CEO Adam Neumann.

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Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.
Saying he was the CEO is misleading at best, probably meant to cause the outrage that generates clicks.....

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Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.

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Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.
Saying he was the CEO is misleading at best, probably meant to cause the outrage that generates clicks.....

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The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.

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Originally posted by 92fstech:

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The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.

This is the part I don't get right here. Why the non-compete? The Company is terminating their employment, then telling them they can't work anywhere else in their realm of experience for 12 months...in exchange for four months severance. What are they supposed to do for the next 8 months?

I get making somebody sign a non-compete at the beginning of employment...but to do it as part of a layoff as a condition of severance, well beyond the duration of the severance package, seems like a dick move.

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That's the kind of stuff that should have sent knowledgeable private investors turning them down flat. They should have gone under long before they hit the wall with the pre-IPO public disclosures.

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Originally posted by FishOn:
Softbank had to pay off Neumann's 500M loan he had against his stock, in addition to cashing out his 1B in equity. Softbank lost 5B on the bailout. This is the kind of crap you see near the end of a run, just like in 1999/2000 when all the junk internet stocks blew up.

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Originally posted by Rey HRH:
Even if his final compensation was more reasonable as in 'millions' instead of billion, it still wouldn't be in the neighborhood of 4 months pay.

Having said that, 4 months pay IS very generous. WTF are people complaining about? When a company shut down, I think I got at most 2 weeks pay.

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Originally posted by ChicagoSigMan:
I have been involved in the financial markets and venture capital for a long time. It has been a long time since I have seen such an egregious case of hype.

There is nothing magical or unique or innovative in WeWork's business. The are not much different than Regus and similar operators who lease space in buildings, divide it up and sublease it to businesses that need workspaces.

The CEO, with his odd behaviour and self-dealing, should have set off giant flashing warning lights in any venture capital office he visited.

The fact that it ever raised the billions that it did or even came close to an IPO is just insane.