Shiny, happy days: Adam Neumann, center, co-founder of WeWork, took part in the opening-bell ceremony at Nasdaq in January 2018, in anticipation of its initial public offering. Last month, the IPO was shelved (Photo by Mark Lennihan/File/AP)

The catastrophic collapse of WeWork’s initial public offering (IPO) has been in the news a lot lately. Most of the coverage has focused on venture capitalists, valuations and juicy details about self-dealing that were revealed in the company’s SEC filing. But as I read articles about the company I started wondering about something else: Can you imagine how awful it must be to work there?

WeWork, which recently renamed itself The We Co., presents itself not just as a company that rents out office space but also (and more important) as a visionary thought leader with lots of innovative ideas about the nature of work and how to run companies in the digital age. The We Co. holds itself up as a model that others can imitate and learn from. That’s odd, because We sounds like a special ring of hell, a place run by posers who have no idea what they’re doing, with loads of inspirational rubbish and rules about not eating meat.

I’m a survivor of startup life and wrote about my own nightmare experience in a memoir, Disrupted: My Misadventure in the Startup Bubble. The place where I worked had a kooky, peppy, cult-like atmosphere, coupled with stress, mind games, and heartlessness that I’d never experienced in any workplace.

The We Co. seems a hundred times worse than my former employer. But there are lots of similarities, most notably the weird mix of silliness and cruelty. As bosses, co-founder and CEO Adam Neumann and his wife Rebekah were touchy-feely hippie types who talked about wellness, spirituality, and ending world hunger. But at the same time they were heartless, ruthless people. Adam told his managers to fire 20% of the staff every year, to get rid of “B” players, and Rebekah, the company’s “chief brand and impact officer,” sometimes fired people after meeting them for just a few minutes, deciding she didn’t like their energy, the Wall Street Journal reported. The Neumanns have been booted, but their wacko dysfunctional culture won’t be easily erased.

High turnover is one of the biggest hallmarks of the new economy, and probably the most toxic. These companies, the disruptor class, don’t see high turnover as something to be embarrassed about. Quite the opposite–they’re proud of it. They believe high turnover signals that they’ve created a “high-performance” culture where only the best of the best can survive.

This lunacy began at Netflix which in 2009 published a “culture deck” that included this slogan: “We’re a team, not a family.” The HR gurus behind this mantra say Netflix is like a pro sports team, where players get cut all the time. At Netflix you should expect to be fired, and probably sooner rather than later. LinkedIn founder Reid Hoffman echoes this sentiment, telling people to think of a new job as a short-term “tour of duty.”

Columnist Dan Lyons

In my own 20-month tour of duty at a fast-growing software startup, I saw more firings than in all of my previous jobs combined. People got fired all the time, often with no warning and sometimes for no real reason. They walked out crying–or stunned. The company tried to put a happy face on these firings, describing them as “graduations,” which of course only made it worse–and super weird.

Living with constant fear of losing your job makes you nuts. And that’s just one form of the crazy-making management practices endemic to new economy workplaces. Noisy, open offices and constant change initiatives cause you to have higher levels of epinephrine, a stress hormone. Elevated epinephrine is linked to psychological problems and even physical ailments like heart disease.

Worse is that if or when you start feeling miserable in one of these places, it doesn’t square with the shiny, happy image that the company projects to the outside world. You start to believe that there must be something wrong with you. If you’re really unlucky, you get a boss like mine, who got off on gaslighting me and telling me that nobody at the company liked me.

I knew it was all some kind of weird psychological game for him. Nevertheless, I slid into depression, and left with my self-esteem in tatters. The damage lasted a long time. After I published Disrupted I heard from countless other people who had endured similar experiences and had felt messed up for months or even years afterward.

We’re constantly hearing stories about nightmare work environments at new economy companies. Zenefits, Zillow, Uber–the list goes on. Why are so many new companies such uniquely awful employers? A lot of it has to do with the business model they use. I call it “Grow fast, lose money, go public, and cash out.” The We Co. has been doubling in size from year to year, but last year lost $1.6 billion and in the first half of 2019 lost another $700 million.

Venture capitalists pumped huge amounts of money into the company–We has raised nearly $12 billion­­–and then pressed management to deliver astronomical growth. For workers, life becomes a constant sprint. You never slow down. The company has no incentive to care about worker health and happiness or work-life balance. Workers get abused, overworked, shortchanged, and treated like disposable widgets. The company burns them out and churns them out.

In fact, that’s exactly what’s going to happen at the We Co. The company’s new leaders, slamming the brakes on its growth strategy, are planning to lay off 10% to 25% of its staff, or 1,000 to 3,000 people.

Gig-economy companies like Uber and Lyft adopt an even more exploitative model and treat workers as contractors instead of actual employees, to avoid providing benefits. Most drivers last less than a year. Who cares? You just find more to take their place.

The collapse of the We Co.’s IPO should be a wake-up call, a signal that this model isn’t working. We’re not producing any great companies this way, and worse, in our mad rush to generate money for VCs we’re making hundreds of thousands of people sick and miserable.

How can we fix it? Capitalism itself needs a reboot. We need to dump toxic “shareholder capitalism” with its notion of running companies solely to benefit of investors and replace it with a healthier version of capitalism in which companies put employees ahead of investors. Focus on making workers happy, and let workers focus on making customers happy.

For now I’m worried about what will happen to the 12,500 employees at We. It’s not just that many have been compensated with stock options that now are worthless. The bigger problem is that We might go bankrupt, putting thousands of people out of work–all because of a reckless, incompetent, self-dealing CEO and a board of directors who were willing to look the other way.

The two co-CEOs who replaced Neumann have already announced plans to sell off several companies that Neumann acquired, which means at least a few thousand employees definitely will have their lives tipped upside down. Those workers will spend the next few months living with even more stress and uncertainty. Most have not even finished recovering from the disruption of being merged into We and then going for the crazy roller-coaster ride of the past two months.

This crazy, high-turnover approach to work is not sustainable. Human beings simply cannot endure the kind of workplace that the new economy has created. Entrepreneurs and investors need to rethink the way they build and operate companies. One model might be a company that competes with We, called International Workplace Group, which the New York Times just wrote about. UK-based IWG is 30 years old and generates roughly as much revenue as We does–but instead of losing billions of dollars, IWG actually turns a profit.

I suppose to the brilliant, forward-looking VCs in Silicon Valley that sounds kind of old-fashioned. Insisting that companies turn a profit won’t cure every problem. But it would at least make it possible for companies to treat employees better. That would be a good start.

Dan Lyons is an author, screenwriter, and journalist. He is the author of two books about workplace culture in the digital age. His most recent book is Lab Rats: Tech Gurus, Junk Science and Management Fads—My Quest to Make Work Less Miserable. His previous book was Disrupted: My Misadventure in the Startup Bubble, which became a New York Times bestseller. Dan was also a writer on HBO’s hit comedy series Silicon Valley