Convene Lays Off 54 Employees After Expanding Too Rapidly
By Mark Hallum December 22, 2022 2:08 pm
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Flex office space provider Convene may have bitten off more than it can chew.
Convene has laid off 54 workers in New York City after a bullish rapid expansion following the easing of COVID-19 restrictions, according to U.S. Department of Labor documents first reported by Bisnow.
At least 20 of the employees, who were let go on Dec. 16, worked at Convene’s Manhattan location, according to the filing. The company also decided it will also close its Chicago offices in the Citadel Center without a timeframe.
“In recent years, we have witnessed a massive change in our industry and persevered — we now recognize that we overinvested in certain areas of the business,” Convene CEO Ryan Simonetti said in a statement. “At the same time, we remain extremely optimistic about our future growth and continue to execute on global expansion opportunities. We are also realistic about the current market conditions, which have forced us to move forward with a streamlined business structure, including reorganizing certain functions and, unfortunately, eliminating several roles to drive profitability in 2023 and beyond.”
The decision to cut back marks another major setback for the company since the start of the pandemic.
In March 2020, Convene laid off one-fifth of its entire headcount, 150 employees, and temporarily shuttered all 28 of its locations nationwide, including New York City, Los Angeles, Chicago, Philadelphia, Washington, D.C., and Boston.
Fast forward to March 2022, Simonetti spoke to Commercial Observer about the company’s newfound confidence in its growth potential, having seen a 320 percent increase in flexible workplace contracts signed in the second half of 2021 and a 50 percent increase in bookings in the third and fourth quarter of that year compared to that same time period in 2019.
Others were feeling the optimism as well at the time with HBC, the holding company behind Hudson’s Bay Co., partnering with private equity firm Ares Management to take a $500 million stake in Convene in April.
This time around, Convene said it still has plans to expand in the San Francisco market with the expected opening of 100 Stockton in late 2023.
The company did not disclose whether any locations would be shutting down or where its total headcount stands today.
Mark Hallum can be reached at mhallum@commercialobserver.com.
