Once hailed as a revolutionary force in the coworking industry, WeWork has seen its fortunes change drastically over the past year. In 2019, the startup was valued at $47 billion and the talk of the startup world. However, plagued by financial woes, executive instability, and the effects of a global pandemic, WeWork now finds itself in a precarious position, with substantial doubts about its future stability.
The losses the company has suffered have been severe. Since its public offering in 2020, the company’s share price has plummeted, from $9.81 to just $0.13 yesterday, a drop of over 36%. In the first half of 2021, it lost $696 million, while revenue only increased 7%. The poor performance is even more concerning considering the company had recently restructured its debt in May. To try and address the problem, WeWork has proposed cost-cutting, increased sales, debt issuance, and asset sales.
The struggling company was also rocked by a leadership crisis in 2019, when founder Adam Neumann’s questionable spending habits were revealed, leading to his ouster. Though Sandeep Mathrani took his place, he could not weather the storm of the pandemic and left the company in May 2021. Currently, David Tolley is serving as interim CEO, with the responsibility to find a candidate to reverse the company’s fortunes.
WeWork’s collapse has been a remarkable downfall for a company that was once the toast of Silicon Valley. The company’s survival is essential, not just for its own employees, but for hundreds of thousands of individuals who rely on its collaborative workspace. Whether the coworking giant will be able to turn around its fortunes remains to be seen.
With information from Reuters
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