2023-08-10 04:00:03
The entrance to a WeWork office in Miami, Florida, December 13, 2022. JOE RAEDLE / GETTY IMAGES VIA AFP
This is only a sentence slipped into WeWork’s quarterly report on its quarterly results, published on Tuesday August 8, but it could well spell the end of the American giant of shared workspaces which has conquered the largest cities in the world since 2010. world, generally in the most popular areas. “There is substantial doubt about the ability of the company to continue its activities”, admits the company.
Even if the company’s turnover increased both in the second quarter (844 million dollars against 815 during the same period in 2022) and in the first half (1.7 billion against 1.6 billion), the losses remain massive, close to 700 million dollars (638 million euros) over the first six months of the year.
WeWork says it is raising this red flag because of multiple factors: increased competition in its industry, an oversupply of available shared workspaces, declining customer retention capacity leading to a decline in these.
More modular
To this should be added the Covid-19 pandemic, which has hit WeWork hard. Though. In 2022 the leaders of WeWork could hope that the epidemic could favor more flexible work solutions which would be favorable to it. It has also since focused on a clientele of very large companies, rather than, as at its origin, on young companies needing to rent only a few offices. But there again it came up against a hostile environment, with in particular the great wave of layoffs which hit the tech companies which were among its largest customers.
Read the decryption (2020): Article reserved for our subscribers In the turmoil, the sharing economy has not said its last word
Still, the evil is more deeply rooted at WeWork and for four years has been akin to a rescue operation of what then seemed to be one of the most promising companies on the planet.
Supported by the largest fund ever created in the field of the new economy – the Vision Fund 1 created by the Japanese Masayoshi Son, boss of the conglomerate SoftBank and endowed with more than 100 billion dollars – the New York company which has not counted on spending to become a world champion in the sector is preparing in 2019 to go public with a valuation of 47 billion dollars.
Abysmal losses
Problem: the examination of the documents necessary for such an operation reveals all the faults of management of the company, and in particular those of its co-founder Adam Neumann, at the head of the company, particularly venal. While the company’s cash is depleted, its losses abysmal, Mr. Neumann appears to have lived at the expense of the company. In September 2019, the IPO was abandoned, the boss landed, and SoftBank, which had already invested nearly $10 billion, came to the rescue to save the company.
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