In 2010, New York-based entrepreneur Adam Neumann had an idea: to lease office space to companies all over the world on a short-term basis.

Usually when a company leases office space, it has to sign a long-term contract; but Neumann wanted to lease space to businesses for terms as short as one month.

It wasn't an original idea. Companies like Regus have been doing that for decades. But Neumann had two key twists:

1) Make the offices cool… so cool that even millennials would want to hang out there. So he brought in free tequila, gourmet coffee, and chic designs.

2) Lose an absurd amount of money in the process

And so began the journey of WeWork nearly a decade ago.

Since then, the company has grown to hundreds of locations. Yet the more successful they became, the more money they lost.

By 2018, WeWork was losing nearly $2 billion annually, and there was no end in sight.

The more money they lost, the more money they had to raise from investors. But the company seemed to have no problems selling billions of dollars worth of shares at progressively higher valuations.

Finally, the music stopped a few months ago. WeWork (technically called the 'We Company') filed IPO paperwork disclosing not only horrendous losses, but some of the most appalling shenanigans ever seen from a major company CEO.

Neumann, it turned out, had personally enriched himself time and time again at company expense.

I've written about this before–

1) He sold the rights to the word 'We' to the company for $6 million.

2) He borrowed money from the company to buy office space, only to lease that office space back to the company at a profit.

3) He sold off hundreds of millions of dollars worth of his own shares while simultaneously convincing investors to put money in the company.

4) Yet despite selling his shares, he awarded himself special rights to be able to out-vote everyone else, cementing his control over the company.

The list really does go on and on… and I expect there will be a Netflix documentary about Neumann's unethical self-dealing some day.

Point is, the bubble burst. Investors weren't putting up with it anymore, and WeWork had to cancel its IPO.

And without an IPO to bring in billions of dollars of new capital, WeWork is now in a terrible cash crunch and rapidly running out of money.

They need to cut costs in a big way… and that means laying off staff.