Flexible workspace provider WeWork, once valued at $47 billion, is now struggling to survive in a post-pandemic world, saying that “substantial doubt exists about the company’s ability to continue as a going concern”.
The company, which reported a net loss of $397 million for the second quarter over the consolidated revenue of $844 million (up 4 per cent year-over-year) in its second quarter, projected a weak future amid losses, projected cash needs and increased member turnover.
"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,” said WeWork interim CEO David Tolley.
After its quarterly results, the company’s shares nosedived more than 30 per cent in after-hours trading on Tuesday. Its stock closed at 21 cents with only a $166 million valuation.
Overall, WeWork’s stock is down 85 per cent since the start of 2023.
WeWork had raised over $22 billion in funding from investors such as SoftBank, Insight Partners, BlackRock and Goldman Sachs.
“In a difficult operating environment, we have delivered solid year-over-year revenue growth and dramatic profitability improvements,” Tolley said in a statement.
“We are confident in our ability to meet the evolving workplace needs of businesses of all sizes across sectors and geographies, and our long term company vision remains unchanged,” he added.
As of June 30, WeWork's real estate portfolio consisted of 777 locations across 39 countries, supporting approximately 906,000 workstations and 653,000 physical memberships.
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