UNITED STATES – American commercial real estate company that offers office sharing work spaces to clients, WeWork has said that it is laying off around 2,400 employees, almost 20% of its workforce, as it seeks to drastically cut costs and improve efficiency.

The long-anticipated layoffs are the biggest move yet by Japanese technology conglomerate SoftBank Group Corp, which is providing a $9.5 billion lifeline and will soon own about 80 percent of WeWork’s shares, to refocus the company on its core business.

Under co-founder and ex-CEO Adam Neumann, WeWork had become bloated and was diversifying into all kinds of areas – including setting up a school and running apartment buildings – without any clear route to profitability.

“As part of our renewed focus on the core WeWork business, and as we have previously shared with employees, the company is making necessary layoffs to create a more efficient organization,” a company spokeswoman said in a statement.

The job cuts are the latest sign of how much WeWork’s prospects have deteriorated – from being worth $47 billion in January and planning in September an initial public offering (IPO), to a company facing a cash crunch and fighting for survival.

WeWork which shelved its plans for the IPO on Sept. 30, a week after Neumann resigned as CEO said that the layoffs began overseas and will start gaining momentum in the United States towards the end of November 2019.

“This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition,” New York-based WeWork added.

The layoffs come even as WeWork considers a change in CEO to replace current Co-CEOs Artie Minson and Sebastian Gunningham, who themselves have only been in place since September.

As part of the restructuring, WeWork whose losses swelled to $1.25 billion in 2019’s third quarter, is also closing or selling peripheral businesses that it set up, including its private elementary school after the current school year.