Flex Office And Events Company Convene Lays Off Dozens, Closes Chicago Office
Flexible office and events space company Convene — which temporarily shuttered all of its locations in the early days of the pandemic — has laid off dozens of workers after its CEO said it expanded too fast in its comeback.
Convene laid off 54 staffers in New York City on Dec. 16, according to a filing with the New York State Department of Labor. Of those who lost their jobs, 34 worked at the company's 101 Greenwich St. headquarters, and the rest worked at locations across Manhattan.
"Convene has had to make the difficult decision to downsize its U.S. workforce to drive profitability in 2023 and beyond," a Convene spokesperson told Bisnow in a statement Wednesday.
The spokesperson didn't answer questions about how many staffers lost their jobs, or what percentage of the company's workforce was cut.
The company has more than 500 employees working in 23 locations in six cities, according to its website. There were no layoff notices posted for its Philadelphia, Washington, D.C., Los Angeles, Boston or Chicago offices as of Wednesday morning. It also operates a location in London.
It is likely that more than 54 Convene workers lost their jobs: Convene's spokesperson said the company is closing its 50K SF location at the Citadel Center in Chicago. It is unclear how many people worked at that location, which opened in 2019 after the company signed a 15-year lease with landlords Angelo Gordon, Hines and Dearborn Capital.
"Like many companies, we've had to reassess the organizational structure of Convene to best position the business for future growth in an increasingly challenging & dynamic macro environment. Unfortunately, this meant making the incredibly tough decision to say goodbye to a number of Convene team members this week," Convene co-founder and CEO Ryan Simonetti wrote in a LinkedIn post last week.
"Our team has been through so much together the last 3+ years; and I feel terrible that we once again had to make hard decisions that impacted such wonderful and talented people. Hindsight 20/20, we would have ramped up slower coming out of the pandemic and not invested so heavily in R&D in certain areas of the business."
Convene was founded in 2009 as an on-demand events space, but grew into offering flexible offices and has taken in more than $260M in private investment, including from some of its landlords, like Brookfield, RXR Realty, BlackRock and Hudson's Bay Co.
In March 2020, the company temporarily closed all of its locations and furloughed or laid off more than 400 staffers, while competitors like WeWork remained in operation. It started reopening outposts in June of that year in a staggered pattern, and brought its meetings and event spaces back even later.
Eventually, the company started growing again. Convene still plans to open a new location at 100 Stockton St. in San Francisco in late 2023, the spokesperson said, adding it is still "evaluating its existing network of locations" and considering "expansion opportunities into new markets."
Flexible office firms are poised to capture a larger share of the office market going forward. A majority of corporate real estate professionals said in a CoreNet Global survey this month they expect more than 20% of office leases will transition from traditional leases to flex leases within the next five years.
That doesn't change the economic reality for operators that grew their portfolios before the pandemic took a battering ram to office demand. WeWork has lost more than $10B in the last three years and Fitch Ratings recently deemed the company's default on its corporate bonds "a real possibility."