WeWork is offering its employees $100 a day, up to $500 a week, to come in to work in some of its U.S. locations, according to the New York Times. Despite orders in at least 28 states telling non-essential businesses to close and employees to stay home, WeWork is keeping all but one of its hundreds of U.S. co-working locations open. WeWork employees overall have been instructed to work from home. But those who are willing to come in to work can receive the bonus, according to a memo to employees from COO Shyam Gidumal and obtained by the Times and by CNBC.com, which has published the entire memo. [Disclosure: I'm a CNBC.com contributor.]
In the memo, Gidumal explains that WeWork is exempted from business closures as an essential business, and that some of its customers are themselves essential businesses. Asked for more detail, a WeWork representative told the Times that the company qualifies as an essential business in New York State because it provides mail, shipping, security, and storage, functions that the state deems essential.
That doesn't quite explain why WeWork is keeping virtually all its U.S. and Canada locations open for co-working. According to its website, a single Brooklyn location is the only one in North America to be closed due to the coronavirus. Given that millions of people around the country are under orders not to leave their homes except to buy food or necessary supplies, tend to sick family members, or seek medical attention themselves -- why is WeWork still encouraging people to leave home and come to its co-working locations?
The explanation is probably simple desperation. The company has been drowning in both red ink and bad press for the past six months. It began with plans for an IPO that were hastily withdrawn after potential investors got a legally required first look at the company's finances. They weren't happy with what they saw, including $1.6 billion in losses and a disturbing habit of making interest-free loans to founder and then-CEO Adam Neumann so he could buy buildings that he then leased back to WeWork.
With losses mounting, a shattered valuation, and no IPO in sight, the company has been promised a generous -- very generous -- bailout from its biggest investor, SoftBank. But last week, with government investigations into WeWork underway and the coronavirus threatening to scuttle demand for its spaces, SoftBank announced that it might change its mind and not buy $3 billion in WeWork shares after all. If SoftBank pulls out, and WeWork locations remain virtually empty as some are now reported to be, the company may not survive.
"Recognition" or bribe?
It was against this backdrop that Gidumal made his $100-a-day offer to employees who come in to WeWork locations. Employees who work from home will continue to receive their usual salaries. In the memo, Gidumal says the bonus is "in recognition of our Community employee's willingness to support our members by keeping our buildings open and operating during these extraordinary times." He doesn't say what many are certainly thinking -- that the money is a thinly-disguised bribe, intended to entice employees to take risks with their health to help shore up a company that may well be gone in a year's time anyhow.
Offering a nice bonus is obviously better than requiring employees to come to the office under threat of being fired. And $100 a day compares very favorably with U.S. military hazard pay which is given to people who do things like parachute jumping and amounts to $150 or $225 a month.
Then again, people who join the military do so because they are willing to risk their lives defending their country. Should anyone risk their life or their health to save a company? Even one with a better balance sheet and brighter prospects than WeWork has? For an extra $500 a week? I don't know about you, but to me the answer seems clear: Of course they shouldn't. And no company should ever ask them to.