A day after reports emerged that Japanese conglomerate SoftBank Group had slashed its planned funding for WeWork from $16 billion to $2 billion, the co-working giant has announced it will rebrand.
Under its new name, “The We Company,” led by Adam Neumann, the company will consolidate its businesses into three main arms: WeWork, its well-known flexible office space brand, WeLive, its struggling residential business, and WeGrow, which includes an elementary school, gym and coding academy.
The company declined an interview for this article, but instead pointed to a blog post published Tuesday.
“WeWork is announcing The We Company, bringing all of our business ambitions together to operate in service of how we work, how we live, and how we grow,” the company’s co-founders wrote, adding that its new mission statement would be to “elevate the world’s consciousness,” which means “being a student of life, for life, where we accept that we are always growing and in a constant state of self-discovery, self-growth, and change.”
However, the company’s upbeat statement is in stark contrast to the economic environment surrounding it, and the industry headwinds. Economists are predicting a downturn in the market this year, and Wall Street’s performance continues to heighten investors concerns going forward. WeWork conceded that in all but two of its markets, leasing prices have declined, according to Fast Company.
WeWork spent twice as much as it made in the first nine months of 2018, posting revenue of $1.2 billion and a net loss of about $1.2 billion. Revenue doubled year-over-year during the first three quarters, but losses went up nearly four-fold.
As part of the turmoil, SoftBank’s stocks took a 20 percent hit between November and the holidays, which in part led to the firm’s decision to reduce its planned investment in WeWork to $2 billion, down from an initial $16 billion. The Japanese firm, led by CEO and chairman Masayoshi Son, has committed $10 billion to WeWork since 2017. This includes investment from the group’s $100 billion Vision Fund, which is backed by the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
In December, it was reported that the sovereign wealth funds had balked at the prospect of investing another $16 billion in the co-working company, which would have given SoftBank a majority stake, buying out Neumann’s other investors.
“WeWork has already experienced unparalleled growth and we are confident that with Adam’s vision and this growth capital the company will be able to aggressively pursue the enormous market opportunity ahead of them,” Son said in a press statement.
In the Fast Company article, Neumann also said he plans to launch “WeBank,” though he didn’t offer up any specifics.