WeWork’s business model may have been called into question by the coronavirus pandemic, but its executive chairman says the company is now near profitability.
The flexible-office startup, founded in 2010, is now on track for positive cash flows by the end of 2021, Marcelo Claure told the Financial Times. In fact, Claure said the pandemic has sent the firm’s demand for private spaces “through the roof.”
Mastercard, TikTok-owner ByteDance, Microsoft and Citigroup have recently signed new lease agreements with WeWork.
“Maybe the buildings are not going to be as dense as they were before for the community side of the business,” Claure said. “But the demand for high-quality workspaces that are sanitized, that [make] people feel comfortable will be at an all-time high.”
Claure — who also oversees operations at WeWork’s biggest backer, SoftBank — first announced in February that the company’s goal was to achieve profitability within two years.
During the first three months of 2020, the company burned through $482 million in cash, marking a 60 percent drop from its previous quarter’s spend of $1.4 billion, according to the FT.
Last year, WeWork’s $47 billion valuation plummeted to $8 billion after a botched public offering attempt, raising broader questions about inflated valuations of tech companies. Now, the company’s valuation is estimated to be $2.9 billion.
Prior to the onset of the pandemic, the beleaguered co-working company took drastic measures to reduce spending including laying off 60 percent of its workforce, which now stands at 5,600 people, down from a high of 14,000 last year, according to the FT.