'Business As Usual Is Over': Knotel Cuts Nearly Half Its Staff As It Tries To Ride Out Pandemic
Knotel laid off 127 of its 400 employees globally and furloughed 68, according to a spokesperson.
"Business as usual is over. The global pandemic and its inevitable economic consequences will be dramatic," co-founder Amol Sarva said in a statement. "Knotel has decided to take sharp action to prepare for the worst case — a long health and economic crisis. We hope for speedy improvement, but Knotel has always been disciplined and the present situation is extraordinary."
The company is switching its focus to serving customers and finding ways to bring resources to support emergency services. The job losses were spread across 17 markets, and 30% of those that are leaving will have a six-month health insurance option.
Knotel still expects to be profitable this year, but has revised its forecast. It predicts a return to a "new normal" next year, Sarva said in his statement.
Knotel, led by Sarva and Edward Shenderovich, reached a $1B valuation in August, after closing $400M in a funding round led by Wafra, a subsidiary of sovereign wealth fund Kuwait Investment Authority.
The company said in October it had some 5M SF across 250 locations around the world. But this pandemic, which has forced people across the globe to work from home and employ social distancing in order to stop the spread, could prove devastating to flexible workspace companies and coworking firms. Convene over the last week has laid off and furloughed more than 550 of its staff, having previously shut all of its 32 locations. The Wing has closed its locations, though WeWork has opted to stay open through the crisis.
Businesses and communities are rushing to deal with the immediate impact of the virus, but many are questioning how our lives, work and homes will be reshaped after the crisis subsides.
“I’m pretty sure that workplaces will never be the same after this,” Sarva told Bloomberg this week, adding that he expects the move toward working from home to last 12 months. “I've been listening and talking to people, and this is 9/11. It’s going to be on people’s minds for a long time.”