We(can)Work it out

Once regarded as one of the most highly valued unicorn companies, the last year has been a rough ride for co-working giant WeWork. In an interesting turn of events, Executive Chairman Marcelo Claure revealed in a recent interview that the long beleaguered company is on a faster track to profitability than once thought. Claure, the former Sprint CEO who joined WeWork’s parent company SoftBank in 2018, told the Financial Times that WeWork expects to be cash-flow positive in 2021, a first stop on the road to turning actual profits.

In October, main investor SoftBank stepped in to right the ship with a $5+ billion bailout. Though, to be fair, the ship is now more of a dingy. Deep cuts followed, with Claure stating the company has shrunk its headcount from 14,000 to 5,600, while divesting other assets including major Manhattan leases and Flatiron School, WeWork’s coding bootcamp.

You can clearly see this saga play out in active job listings, with a massive drop from September to November of 2019. The beginning of 2020 saw some stabilization, followed by another steep drop in March. Current active job listings can be counted on one hand, with just two open jobs showing up as of this week.

Though more steep declines in job listings were seen as COVID took hold, some speculate the pandemic may ultimately benefit WeWork’s long-term. With the pandemic-induced recession causing a drop in new commercial leases, WeWork anticipates large corporations will look for smaller leases to create satellite offices in areas where their employees have worked from home since March. Even as a controversy over rent charges during the pandemic has made headlines, Claure said revenue has held steady.

We’ll keep an eye on WeWork to see how the co-working company fares as our move away from traditional office environments continues to play out; and whether we continue to see the same relationship between job listings and valuation.

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