WeWork cuts office space in a bid to save cash
WeWork has announced it would be closing some of its US offices in a bid to save costs and boost profitability.
Announcing its third quarter results, the flexible office space said it would be shutting about 40 “underperforming” offices in the US, comprising of approximately 41,000 workstations.
WeWork said that although these closures are expected to reduce top-line revenue, they are expected to contribute approximately $140m to annual adjusted EBITDA through rent reductions and operating expenses.
Revenue for the third quarter was $817m, an increase of 24 per cent year-over-year, while net losses were $629m.
“The long-term value of flexibility is clear and we remain focused on strengthening our business while navigating a volatile macroeconomic environment,” said CEO and Chairman of WeWork Sandeep Mathrani.
“As evidenced by our growth in revenue, reduced costs, optimized portfolio and reinforced balance sheet, we are leveraging all the tools at our disposal to continue executing against our goals.”
Mathrani, who took the reins from co-founder Adam Neumann, vowed the cut spending and drive profitability.
Andre Fernandez, WeWork’s chief financial officer said inflation was particularly challenging in the European market, with energy costs soaring.
WeWork’s third quarter gross sales in London were equivalent to 35 per cent of the traditional office market leasing on a square-foot basis despite the fact that its portfolio represents approximately one per cent of the total office stock.