13 December 2023

WeWork Says Goodbye to 40 US Locations

By Ronald Smith

WeWork, the leading provider of flexible office space worldwide, has just announced a plan to close approximately 40 locations in the United States. This includes around 41,000 workstations.

WeWork’s Farewell to 40 US Locations

These closures will mainly target locations that WeWork considers to be underperforming. The majority of these closures are expected to take place in November. The purpose behind these closures is to reduce expenses related to rent, tenancy, and building operations. By doing so, WeWork hopes to offset the decrease in revenue.

This decision follows WeWork’s report of increased losses in the third quarter of this year, despite a positive year-on-year growth. Once fully implemented, these closures are estimated to contribute approximately $140 million to WeWork’s annual adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

WeWork Says Goodbye to 40 US Locations

What is WeWork?

Let me tell you about WeWork. They’re a cool company that makes awesome workspaces for businesses and freelancers to share. They have both real-life spaces and online spaces where people can work together.

They’re based in New York City and they have lots of spaces all over. In the United States alone, they have a whopping 19.8 million square feet of workspace! And get this, they have a whopping 756 locations in 38 different countries!

Some of their most famous spaces are in giant skyscrapers in Manhattan. You can also find them on cool streets like Seventh Avenue in Seattle, Constellation Place in Los Angeles, and the Salesforce Tower in San Francisco.

Even though they’re shrinking their workspaces in the United States, they’re still growing everywhere else. This year, they already signed leases for over 20 new spaces in different countries. That’s gonna give them around 18,000 new workstations!

The Impact of WeWork Closures on Businesses and Freelancers

As of now, WeWork has not yet disclosed which of their locations will be closing in their efforts to reduce costs. All I can tell you is that WeWork Chairman and Chief Executive, Sandeep Mathrani, referred to these locations as ones that do not meet their design standards, have become outdated, or simply face a surplus in the market.

It is crucial for businesses and freelancers who rely on WeWork’s co-working spaces to know which locations will be affected. In case their current space shuts down, it might be necessary to come up with a work-from-home plan until a new co-working space can be found.

To stay prepared, businesses that suspect their location could be at risk should start considering a relocation now. This way, they can be ready to make a move if necessary.

WeWork Utilizing All Available Resources

I wanted to share some exciting news about WeWork’s performance in the third quarter. It’s clear that our hard work and strategy to adapt to the changing work landscape is paying off. I believe that flexibility is crucial in today’s world, and we are committed to improving our business while dealing with unpredictable economic conditions. We have seen remarkable growth in revenue, lowered costs, optimized our portfolio, and strengthened our financial position. It’s evident that we are utilizing every tool available to achieve our goals.

In the third quarter, WeWork’s revenue reached an impressive $817 million, showing a 24% increase compared to the previous year. This demonstrates our dedication to growth. However, we did face a net loss of $629 million, which includes some non-cash expenses totaling around $430 million.