(Bloomberg) -- The co-working business is rapidly retrenching. Industrious joins a long list of startups making deep cuts in recent weeks.
Industrious is dismissing or furloughing about 30% of staff and reducing salaries in response to the economic slowdown caused by the coronavirus pandemic, the company said Thursday. The New York-based startup, which designs and manages office spaces for businesses seeking short-term and flexible leases, is backed by more than $200 million from investors such as Brookfield Properties.
Many co-working and office space providers are getting hit hard and face the prospects of their small-business customers not renewing contracts or defaulting on rent payments as the economy tightens and workers are stuck at home. Knotel, a rival office-space startup, reduced its headcount by half last week, cutting 30% of staff and furloughing another 20%. WeWork has also been cutting staff, including around 2,400 last fall, dozens more in February and around 250 in March.
Industrious is cutting about 90 jobs and furloughing or reducing hours for 64 more from its workforce of about 500, said Jamie Hodari, the chief executive officer. Those staffing the company's co-working locations won't be affected, he said. Hodari will reduce his own salary by 75%, and others will take pay cuts as well, he said. Displaced workers will get at least a month of severance pay, access to three months of health insurance and in some cases, early access to stock options, Hodari said.
“These are painful cuts to make sure the business is in a position to weather the storm that's coming,” Hodari said. “While we've historically been extremely focused on risk mitigation and guarding against a recession, which has helped us in this moment, no plan or strategy can dissipate the effects of this global crisis completely.”
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