‘It’s Definitely Pretty Empty’: Why Saving WeWork Will Be Hard

In a statement, a WeWork executive said that given enough time, his company’s prime office spaces would be successful.

“Location and market maturity play a significant role in driving building occupancy and profitability, which we are highly focused on under our new direction,” said Nick Worswick, global head of sales at WeWork. “We look forward to delivering an even better workplace experience for our members.”

Indeed, having more streamlined operations could lead to considerable savings.

With the departure of Mr. Neumann, whom SoftBank agreed to hire as a consultant for four years at a cost of $185 million, WeWork may no longer veer into projects that distracted staff and cost the company money. Under him, WeWork set up a private school in Manhattan, WeGrow, which was run by his wife and which the company plans to shut down. It also recently scrapped a plan to expand its residential offering, WeLive, into Seattle.

And new management may save money simply by not engaging in costly acquisitions. WeWork paid $43 million for Spacious, a small co-working company, this year, according to deal documents reviewed by The New York Times. Spacious’s expenses far exceeded its revenue, according to financial statements.

The company might also have to do away with another expensive business practice — offering deep discounts to lure tenants.

Jamie Hodari, chief executive of Industrious, a rival co-working business, said Mr. Neumann had tried hard to tempt his customers away. In 2017, Mr. Hodari said, he flew to Atlanta with Mr. Neumann on a corporate jet — a luxury that few start-up executives enjoy. During the flight, Mr. Neumann asked to speak to him alone, Mr. Hodari said. What came next seemed as if it had been ripped from a made-for-TV drama: Mr. Neumann told him that he was going to “bury” Industrious, Mr. Hodari said.

READ ALSO  China's plans to go to the Moon, Mars and beyond

First, Mr. Neumann said he would offer a year’s free rent at WeWork to Industrious customers, according to Mr. Hodari. If any stayed at Industrious, he would offer them two years free, and if any remained after that, the free period would go up to three years.

Source link

WP Twitter Auto Publish Powered By : XYZScripts.com