Earlier this week, shared-office-space company WeWork packed at least 100 people into its New York headquarters to discuss its impact on the city’s real estate market, and its interest in collaborating with landlords. The attendees, mostly men in suits, milled about to Breakbot’s “Baby I’m Yours” near a breakfast buffet featuring oatmeal, avocado toast, and two kinds of fruit water.
WeWork, which is looking to raise money at a $35 billion valuation, often makes grandiose claims, and the presentation that morning by chief communications officer Jen Skyler contained a particularly impressive one.
“If you were to take all these members and say they were one company,” she said, referring to the 50,000-plus paying members WeWork has in New York City, “we would be the largest private-sector employer in the city.”
This isn’t the first time WeWork has framed itself as an “employer” based on the output of its tenants.The company cited the same talking point about being New York City’s largest private-sector employer in an “economic impact” report released on May 8, in which it also claimed to represent 2% of the city’s total gross domestic product.
Kate Wittels, a partner at HR&A Advisors, from whom WeWork commissioned the economic impact report, said it was designed to highlight the broader contributions of WeWork members to buildings, neighborhoods, and cities—not to claim that they are WeWork employees. “The point comparing it to how big other employers were was just to contextualize what 50,000 means,” she said. “We could have compared it to a small town.”
WeWork members, after all, aren’t anything like WeWork employees. They don’t get paid by WeWork or receive employment benefits, nor are they working on WeWork’s corporate business. Quite they opposite: These members are paying tenants of WeWork’s office spaces, which in most of Manhattan start at $550 a month for a dedicated desk and $600 for a private office. WeWork has also worked to lure corporate tenants (paywall), recently signing a massive lease with Facebook in Mountain View, California. Such companies would hardly consider themselves and their workers to be WeWork employees.
The irony is particularly great in a corner of the economy where startups like Uber go to great lengths to ensure that people actually doing work for them are not considered employees, with minimum wage and benefits, but rather independent contractors.
Every good startup has a story to sell, but WeWork’s is whimsical even for Silicon Valley. Not even cucumber-kiwi fruit water and avocado toast can wash down ideas like “community-adjusted ebitda,” the metric WeWork dreamed up to sell seven-year bonds, which immediately slumped (paywall). As the company continues to seek financing to covers heavy losses (paywall), touting its economic impact is a quick route to wooing local communities, and perhaps reassuring investors.
“They have an aura,” Kent Covington, a real estate broker, said at the event. “There are a few companies like that. They’re not profitable, but they can break traditional rules.”