- WeWork added a record number of desks in the third quarter, showcasing the ousted CEO Adam Neumann’s high-growth strategy, per an earnings presentation reviewed by Business Insider.
- Companies with more than 500 employees continue to make up a bigger share of WeWork’s member base, a major focus for the company’s new leadership.
- Overall, the company lost $US1.3 billion in the third quarter, compared with $US500 million in the third quarter of 2018.
- For more stories on WeWork, click here.
WeWork went in to hyper-growth in the third quarter, according to an earnings presentation, in what could be the last of the office company’s big expansion periods as it tries to stabilise.
WeWork added a record 115,000 desks during the quarter, compared with 53,000 in the third quarter of 2018, according to the earnings presentation reviewed by Business Insider. That growth led to a slight dip in occupancy, down to 79% overall and 87% for locations opened for more than two years.
By comparison, its coworking rival IWG, formerly known as Regus, had an average occupancy rate of 69%, according to the company’s most recent earnings report in August.
Overall, WeWork lost $US1.3 billion in the third quarter, compared with $US500 million in the third quarter of 2018. WeWork didn’t include a cash-flow statement in the presentation, but its cash balance, including both restricted and unrestricted cash, declined by about $US1 billion in the period, according to the document, dropping from about $US3 billion at the end of June to $US2 billion at the end of September. It ended the third quarter with less than $US1.2 billion in unrestricted cash.
Multiple reports before its $US9.5 billion bailout by SoftBank indicated that the company was on track to run out of cash by mid-November.
WeWork filed to go public in mid-August but delayed and then called off the initial public offering a month later after investors balked at the company’s corporate governance and valuation. Adam Neumann stepped down as CEO in late September.
Working with big companies continues to be a major focus. Companies with more than 500 employees made up 43% of WeWork’s members in the third quarter, compared with 34% a year ago.
In the spring, Artie Minson, who is now one of WeWork’s co-CEOs, told Business Insider that WeWork was “really just getting started” with what it calls enterprise clients.
“From an employer standpoint, WeWork is a better experience for their employees and meaningfully cheaper on a per-employee basis” than traditional office space, Minson, then WeWork’s copresident and chief financial officer, said. “The CEOs like us and the CFOs like us.”
In an investor presentation released last week, WeWork emphasised that such customers, rather than startups or small companies, were its future.
Overall, WeWork ended the quarter with 625 locations in 33 countries – nearly double the locations from a year ago.
Now, WeWork is on a path to stabilise after years of explosive growth. Since mid-October, the company has moved to cut or downsize some of those businesses, initiating layoffs at the coding bootcamp Flatiron School and at Meetup last week and putting the company’s private plane up for sale, as Business Insider previously reported. It’s also outsourcing cleaning staff in the US and Canada and preparing major layoffs.
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