WeWork’s Third Quarter Loss Doubles to $1.8bn
Co-working giant WeWork has reported a net loss of US$1.25 billion (A$1.84bn) over the third quarter as expenses far outpaced revenue growth.
According to a financial document presented to bondholders, the New York-based company reported a net loss, surpassing its sales and more than doubling its losses for the same period last year.
During the same period, WeWork revenue for the third quarter doubled to US$934 million ($1.3billion), up from US$482 million ($700 million) a year earlier.
It has been a rapid fall for the once promising office-leasing company, valued at $47 billion in January, was valued at $8 billion by Japanese telecom giant SoftBank, less than the $10 billion invested by Softbank so far.
SoftBank, which kept WeWork afloat with a $3 billion investment, took majority ownership of the struggling unicorn startup last month, installing executive Marcelo Claure to help turn around the co-working giants fortunes.
Founded in 2010 by Adam Neumann and Miguel McKelvey, WeWork provides members around the world with space, community, and services through both physical and virtual offerings.
However Neumann was stood down as chief executive with revelations breaching his fiduciary duties by engaging in self-dealing and mismanaging WeWork ahead of its botched public offering. Neumann walked away with nearly $2.5 billion.
WeWork has spent recent months adding 115,000 new desks bringing its total to 719,000, however its occupancy rate in its offices has declined to 79 per cent, from 84 per cent a year before.
According to CNBC, the company is also actively seeking its new chief executive, with T-Mobile's chief executive officer and former president John Legere among its top candidates.
Legere took the helm at T-Mobile seven years ago, and lured millions of customers away from rival providers.
WeWork, currently being steered by co-chief executive officers Artie Minson and Sebastian Gunningham, is now expected to focus on developing the profitable parts of the business, as well as selling assets and cutting jobs.
The company has ramped up its marketing and advertising both online and on TV to attract new customers to its co-working workspaces.
