WeWork Lost US$2.1 billion in 1Q2021

WeWork, a US real estate company that provides shared workspaces and other services, reported a US$2.1 billion loss in 1Q2021 due to the work from home policies, which led the company to see a 30 percent plunge in customers. Before the report came out, the company had announced it was going to public via a merger with BowX Acquisition Corp. 

WeWork reported a net loss of US$2.06 billion on revenue of US$598 million. The company said it finished the quarter with US$2.2 billion in cash and unfunded cash commitments. In its report, the company announced that “WeWork continued to see encouraging signs of recovery with sales activity, a critical indicator of future revenue, ramping over the first quarter, as the company achieved gross desk sales of 24,000 in January, 25,000 in February and 38,000 in March.” The company reports it is raising US$1.3 billion in 2021 from the flotation to capitalize on the partial return to office life and has projected that occupancy at its restructured, more profitable portfolio of sites will hit 90 percent by 2022.

Before the numbers came out, WeWork announced its new strategies to evolve its business in the new normal. The first one is through a strategic partnership. “In the first phase of this strategic partnership, ARHT’s hologram technology will be rolled out in sixteen locations around the globe by the third quarter of 2021. The partnership will result in implementation across a total of up to 100 WeWork buildings.” This step will help the company integrate emerging technology into its global portfolio of buildings and continue to bolster its flexible event and production space offerings. To its customer, this investment will provide holographic conferencing technology, which represents a new option for businesses interested in reducing travel expenses, while generating more impactful interactions than traditional streaming and video conferences. 

The second strategy is a new form of payment, as the company will begin to accept payment in select cryptocurrencies. WeWork allied with BitPay and Coinbase, which will allow the company to expand its flexibility by utilizing cryptocurrency for inbound and outbound transactions. WeWork CEO Sandeep Mathrani said, “WeWork’s strength is in our ability to evolve and best meet the diverse needs of our members around the world. As our member base continues to grow in the fintech sector, so will our ability to adapt to their needs and service a new economy. WeWork has always been at the forefront of innovative technologies, finding new ways to support our members. It only makes sense for us to expand on the optionality we provide by adding cryptocurrency as an accepted form of payment for our members.”

In Mexico, WeWork currently has 26 coworking spaces distributed between Mexico City, Jalisco and Nuevo Leon. The company has been in Mexico since 2016.