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WeWork, the floundering landlord that rents shared office space to gig workers and start-ups, nearly quadrupled its losses to $2.1 billion in this year’s first quarter, compared to $556 million vaporized during 2020’s first three months, the Financial Times reported.
WeWork paid $494 million to cancel leases, escape unprofitable locations, and otherwise restructure its assortment of properties during the period. Similar costs were only $56 million in the first quarter of last year.
At the same time, the company’s number of tenants or “members” fell from 693,000 in March 2020 to 490,000 a year later, according to documents seen by the FT.
Year-on-year quarterly revenue went from $1.1 billion in 2020 to $598 million this year.
WeWork expanded at a breakneck pace in 2019, taking prime office space in high-cost markets such as London and New York City.
After failing to go public in September 2019, it now has announced a merger with BowX Acquisition, a SPAC, that will finally bring WeWork to the public market.
In March, the month in which the BowX deal was announced, WeWork pledged to investors that revenues would more than double from 2020’s $3.2 billion to $7 billion by 2024.
TREND FORECAST: As we had reported before the COVID War was launched in 2020, the WeWork model was already overworked. Thus, we maintain our forecast for it to remain a weak sector, especially as the work-at-home trend continues to solidify and new hi-tech advancements create new virtual realities.