Lockdowns, social distancing and remote working have all had a profound effect on the office space provider’s operations.
Lockdowns and remote working have hit WeWork hard, with the office space provider posting a $2.1bn loss in the last quarter.
Quarterly revenues were down almost half from $1.1bn to $598m, according to a report from the Financial Times, with almost 200,000 ‘members’ leaving the service.
The company is preparing to make its long-awaited debut on the stock market, more than a year after it withdrew IPO plans. But on this occasion it is facing a radically different market for office space demand as the pandemic continues to dictate remote working.
The company expects to see something of a rebound as businesses start returning to offices, if only partially or on a hybrid basis. This could see an uptick in demand for the short-term leases that WeWork provides.
Occupancy rates in the last quarter were at 50pc, a slight increase on 47pc the quarter prior. Earlier this month Klarna, Europe’s biggest privately held fintech company, took up a large space run by WeWork in London for its new headquarters.
However, the latest quarterly numbers could cast a pall over the Softbank-backed company’s renewed efforts to finally go public.
WeWork’s previous attempt to go public in 2019 was abandoned over concerns around the control and leadership of then chief executive Adam Neumann. The co-founder has since left that position, while the company significantly revamped its balance sheet with job cuts and selling off various assets. The company is now led by real-estate veteran Sandeep Mathrani.
This new effort to go public is different. This time WeWork is merging with a special purpose acquisition company, or SPAC, that is already listed on the Nasdaq. The deal with BowX Acquisition would reportedly value WeWork at around $9bn.
The unsteadiness of the office space market and the fact that returns to the office will be patchy rather than a wave will be food for thought for many investors.