After a year of savage cuts and restructuring following a disastrous IPO attempt that saw then-CEO Adam Neumann evicted and the company’s value plummet, WeWork’s new head says he finally sees profitability on the horizon for 2021 and, if all goes well, another IPO, Bloomberg reports.
CEO Sandeep Mathrani told reporters that the company is “100% done with rightsizing” and slated to hit profitability by 2021, Bloomberg reports.
Mathrani said the business is rebounding in Asian markets, including China, South Korea and Singapore, and was at 66% occupancy in Q1.
Profitability achieved, Mathrani says he will “revisit the IPO plan” — the last plan dramatically collapsed in 2019 and saw the company enter into a tailspin, hemorrhaging value to less than 90% of its $47 billion peak, selling off assets, renegotiating contracts and laying off around a third of its workforce.
Mathrani said the company still has the billions its largest investor SoftBank provided as part of a bailout last year, and that the company does not owe Neumann any more money from the $185 million consulting deal he received as part of his controversial exit.
Mathrani says he still speaks about the business with Neumann — who still holds a sizable stake in the company — on a regular basis, about twice a month.
WeWork’s meteoric rise was followed by a calamitous fall. Within the space of a decade, it expanded from a single coworking office to a company with hundreds of locations and thousands of employees in cities around the world, along with a coterie of corporate clients, businesses and freelancers making use of the service. At various points it was the biggest private office tenant in London and New York. Though its valuation was high, and grew until its $47 billion peak, the company burned through money, made spectacular losses and ran on a business model many in commercial real estate determined highly questionable: signing long-term leases and subletting space, typically to freelancers or businesses, on a short-term basis.
Many of the startup’s shareholders and employees have been waiting on a $3 billion payout from SoftBank in order to jump ship. This was postponed and, eventually, cancelled altogether. According to a new court filing in a lawsuit brought by Neumann, SoftBank’s head and WeWork’s then chairman discussed various ways to postpone the payout by text, with the former saying to “use whatever excuse” to make sense of the delay.