WeWork To Close 40 US Coworking Centres
USA – Coworking space operator WeWork disclosed on Thursday that it intends to close down around 40 outlets across the country in an attempt to slash expenses, reported Fox Business on Friday (11 November, SGT).
In its earnings release, the company said the coworking centres to be shuttered are underperforming and contains a total of 41,000 workstations. The closures are expected to largely happen in November.
“Members in these locations have all been notified” and most of them have been transferred to “higher-quality WeWork assets,” said WeWork Chief Executive Sandeep Mathrani, adding that closures are part of continuing efforts to “prune the portfolio” that began after he was hired to lead the company in 2020.
The coworking space operator said that while the “closures are expected to reduce top-line revenue,” it is also expected to slash office rent, tenancy and building operating expenses. After fully implemented, it’s expected to contribute approximately US$140 million to WeWork’s yearly adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA).
In Q3 2022, WeWork’s revenue increased by 24 percent year-on-year to US$817 million, while its net loss narrowed to S$629 million during the same period.
In its guidance, the coworking space operator forecasted that it would register a revenue ranging between US$870 and US$890 million during the 4th quarter of the year, while the revenue for the whole of 2022 is expected to range from US$3.35 billion to US$3.37 billion. Comparatively, the company had previously guided a full-year revenue of US$3.4 billion to US$3.5 billion.