WeWork’s losses nearly doubled to $ 2.1bn in the first quarter of this year, with a partner company retiring more than a quarter of its members and saving hundreds of millions of dollars to renovate its site.
Records that the Financial Times showed were deteriorating and the long-term outbreak of the epidemic caused WeWork’s damage to rise sharply from the $ 556m loss that occurred in the first three months of 2020, which was slightly affected by the coronavirus epidemic.
Stability and co-founder sacked Adam Neumann also calculated about $ 500m in losses, said a person close to the company.
WeWork’s mid-term revenue fell nearly 50% annually from $ 1.1bn to $ 598m and the company lost about 200,000 customers, according to documents seen by FT. The number of WeWork “members” dropped from 693,000 in March 2020 to 490,000 the following year.
Reconstruction and other related costs recorded from $ 56m in the first quarter of 2020 to $ 494m in the first quarter of 2021, when WeWork came out of nowhere.
The results confirm the magnitude of the WeWork crisis, which told prospective investors in March that annual revenue could rise sharply from $ 3.2bn last year to $ 7bn by 2024. We are planning a second round of operations this year.
The company has also grown exponentially in preparation for offerings starting in 2019, renting out large buildings at offices around the world such as London and New York. With the help of billions of dollars from SoftBank, a major contributor, the company’s revenue rose to $ 47bn in 2019.
But the figure fell as traders explored how the company was spending a lot of money with continuous losses, as well as a stable culture established by Neumann. Eventually, the proposed IPO was withdrawn and Neumann resigned as chief executive.
A source close to the company added that WeWork has a chance to raise $ 2.2bn and, with the exception of a single loss, is “in the business and financial sector”.
WeWork declined to comment.
Under Sandeep Mathrani, who became senior in February last year, WeWork is cutting costs. Sales, purchases and management averaged about half to $ 274m between the first quarter of 2020 and the first quarter of 2021. The cost of opening new offices and operating existing ones fell by about $ 160m to $ 852m over the same period.
With new managers promising a more reliable approach, WeWork is also trying to get the team going through a partnership with BowX Acquisition, a special purpose-based company founded by Vivek Ranadivé, founder of California-based software group Tibco, at a cost of $ 9bn.
The deal will raise $ 1.3bn in WeWork, $ 800m from vendors such as Starwood Capital, Fidelity and BlackRock and the $ 483m BowX fund raised at the start of the campaign.
Additional reports by Andrew Edgecliffe-Johnson