The end of shared workspaces?
Stocks of WeWork, the once widely acclaimed office space-sharing company, has experienced a sharp decline after it raised “substantial doubt” about its future.
During after-hours trading in New York, the value of the company's shares plummeted by nearly 24%. Shares in the company have fallen by more than 95% in the last year. Shares fell by almost a quarter in extended trading on the 9th August to $0.21 (£0.16). This coincided with the release of the company’s Q2 2023 report.
Within the report, WeWork expressed that it was imperative for them to secure extra funding in order to ensure their financial stability throughout the upcoming year. This plan involves raising additional capital through the delivery of stocks or bonds, or asset sales. The management are due to move to reduce rental costs and limit capital expenditures.
“In a difficult operating environment, we have delivered solid year-over-year revenue growth and dramatic profitability improvements,” David Tolley, Interim Chief Executive Officer, commented. “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.”
“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,” continued Tolley. “Although we have more work to do, the talent and energy of the WeWork team is extraordinary, and we are resolutely focused on delivering for our members for the long term. The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimisation efforts, and maintaining a disciplined approach to reducing operating costs.”
WeWork currently has a total of 512,000 members at its workspaces in 33 countries around the world.