Flex-space startup Knotel just laid off 30% of workers and furloughed 20%
  • Knotel just laid off 127 employees and furloughed 68, a company spokeswoman said. 
  • The company had raised $400 million in August at a $1 billion valuation.
  • The coronavirus is hitting real estate hard as offices across the country temporarily shutter and tenants struggle to pay rent.
  • Visit Business Insider’s homepage for more stories.

Knotel is the latest flexible-space company hit by layoffs, Business Insider has learned.

The company laid off 127 employees — 30% of its workforce — and furloughed 68, which is 20% of its global employee base. The cuts were distributed evenly across Knotel’s 17 markets, a spokeswoman said. 

Employees who were laid off could choose a severance package: two weeks of salary or six months of health-insurance coverage.

“We are making every effort to do right by departing employees by providing severance, healthcare coverage and other considerations,” a company spokeswoman said in a statement.

CEO Amol Sarva said the company was switching its focus for the short term to customer service and supporting emergency services.

“The global pandemic and its inevitable economic consequences will be dramatic,” he said in a statement, adding that he still expected the company to be profitable this year. “Knotel has decided to take sharp action to prepare for the worst case — a long health and economic crisis.”

In January, Knotel laid off close to 20 people in one of its New York offices, real estate publication The Real Deal reported at the time.

In August, Knotel completed a $400 million round of fundraising led by Wafra, the investment arm of Kuwait, as well as Japan’s Mori Trust, Itochu Corp., and Mercuria Investment Co. The round valued the company at more than $1 billion.

Other flexible space companies have cut staff as they close locations and their tenants struggle to pay rent.

On Monday, Convene, the Brookfield-backed shared-spaces company, furloughed 421 employees as its 32 locations stand empty. Last week, Convene laid off nearly 150 employees.

Earlier in the month, WeWork said in a government filing that it would lay off 45 New York employees. A representative for WeWork did not respond to a request for comment about those layoffs.

The embattled office company is keeping its offices despite criticism from tenants and some local government officials. 

Women-focused coworking company The Wing, which has a dozen locations in the US and London, said on March 13 it would close its locations until April 1. During the closures, the company said it would not charge members, and on Monday, CEO Audrey Gelman said The Wing would donate its New York space to coronavirus relief efforts.  

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