WeWorks toxic phone booths were created in-house by its Powered by We business – Business Insider
WeWork plans to do more tests on phone booths after discovering thousands of them contained the potentially harmful chemical formaldehyde, according to an email seen by Business Insider.
The toxic phone booths were designed internally by WeWork and built by a contract manufacturer in China, multiple sources told us.
WeWork did not have detailed supply chain management systems in place to determine where the Chinese vendor sourced its materials, these people say.
WeWork originally created the phone booth design with high-end audio booth maker Studiobricks. But Studiobricks did not make the toxic phone booths installed in the US, the CEO told us.
Those problematic booths were an internal project under WeWork’s “Powered by We” program, multiple people said, and came as the company was aggressively expanding into new locations and business ventures.
On July 31, one of WeWork’s New York community managers took to the company’s #buildingopen_badasses Slack channel and asked,”Has anyone experienced the ‘off-gassing’ (smell of chemicals) of the phone booths post openings? Have you addressed member concerns on the subject?”
Two other people replied offering ideas as to where the smell might be coming from, seemingly unfamiliar with the problem. But a few days later, in early August, another community manager replied. “yes! Been a major issue for us at 575 Lex.”
What WeWork didn’t say, but what several sources close to the matter have confirmed to Business Insider, is that the toxic phone booths were not simply the result of a random shipment of defective office furniture — the booths were designed and contract manufactured by WeWork under its “Powered by We” program.
However, the phone booths that were contaminated with formaldehyde arrived later.
Although they looked almost identical, these booths were not made by Studiobricks, the Studiobricks CEO told Business Insider. They were built by a Chinese contract manufacturer, three people told Business Insider.
That Chinese company has since been shut down, these people said, and Business Insider was unable to determine its name.
“Our booth is made in Spain, using all materials [that comply] with EU regulations. We are not buying anything, anything in China,” said Studiobricks USA CEO Miguel Donoso-Cortes Esteve.
“We were working with WeWork on the design. It was a collaboration, a hybrid of our design and their design. Then they chose a different kind of company to manufacture that booth in China. We cannot complain about their using the design, as it is not our design, not patented,” he added.
Studiobricks remains WeWork’s phone booth partner for Europe, the Middle East and South Africa, Esteve said, but it has only installed 34 phone booths total in the United States.
WeWork declined to comment on its manufacturing process, the name of the Chinese contractor or the internal teams responsible, but a spokesperson told us:
“The safety and well-being of our members is our top priority. We regret the impact this issue has had on members at some of our locations, and we are working to remedy this situation as quickly as possible. Potentially impacted phone booths were taken out of service immediately and the full removal process will be completed soon.”
Another person familiar with the situation said that the trouble seemed to come from the requirement to make the phone booths fireproof and the Chinese manufacturer’s choice of glue. Business Insider has been unable to confirm that the glue was the source of the problem.
The ‘hubris’ of Powered by We
WeWork’s choice to use a Chinese manufacturer was due to the company wanting to build booths as quickly as possible to meet demand as the company rapidly opened new locations throughout the US in 2019 and as it signed new enterprise customers, according to one of the sources.
The “Powered by We,” program is responsible for custom-designing offices for larger companies including Softbank sister company Sprint.
The Chinese look-alikes do not have Studiobricks logo, nor do they have any other manufacturer’s logo easily visible, one of the sources told Business Insider.
Business Insider heard from several pregnant woman who felt frustrated by the lack of information from WeWork.
“I joined a WeWork location this past January when I was newly pregnant, spent many hours during my pregnancy in the booths and had pregnancy complications that put me on modified bed rest this summer. I’ve asked the company to send me a list of phone booths affected so I can gauge my exposure and the timing,” one woman told Business Insider, who asked not to be identified because she was not authorized by her company to speak.
WeWork did not give her such a list.
On October 28, in an email seen by Business Insider, the community team told a tenant that WeWork still plans to conduct additional tests:
“WeWork does plan to conduct additional sampled testing. But out of an abundance of caution, WeWork has removed all potentially impacted phone booths from service and is working to remove all potentially impacted phone booths from the premises as quickly as possible, and will share updates about this situation as soon as we’re able.
If you have any health concerns, we encourage you to speak with a doctor.”