WeWork has expressed “substantial doubt” about the flexible space provider’s future, citing the company’s existence as a “going concern” (source: TechCrunch).
Announcing the company’s earnings on in a
regulatory filing on Tuesday (8 August) - a net loss of $397 million for the second quarter on revenue of $877 million - WeWork interim CEO David Tolley said: “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”
WeWork’s revenue was up 4% year-over-year, however David noted the company’s future hinges on “successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”
This is set to involve cutting rent and tenancy costs, increasing new sales, controlling expenses and seeking additional capital.
While the company has been on the brink of liquidity since 2019 (source:
Financial Times), David maintains “now is the perfect market for a company like WeWork given our scale, given our size, and given that the market is really moving our way”.
Speaking to Yahoo! Finance, he continued: “I think it’s not only a short-term scramble for space, with WeWork, I think there’s a structural shift going on, and we’re very well-positioned for it.”
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