Flex office provider Knotel is tightening its belt even more as Manhattan workers balk at the idea of returning to the workplaces.
On a conference call Thursday afternoon, the company announced it has laid off about 20 people, bringing its total headcount to 250, Business Insider reported. Amol Sarva, Knotel’s CEO, said he hoped the company would achieve profitability by the end of the first quarter of 2021.
During the call, Sarva said that Knotel would continue to trim its footprint, and that vacancies have plagued the company. Sarva said he had hoped for more of an economic upturn by now, but it hasn’t materialized.
“We have no crystal balls, but the scenarios that we considered didn’t pan out. I own that,” Sarva wrote in an email reviewed by Business Insider.
Knotel’s troubles — including late payments to contractors, vacancies and an uncertain path to profitability — predated the pandemic. But the shift to remote work and employees’ reluctance to return to the office has made the company’s trajectory even more uncertain.
After Knotel allegedly skipped paying rent at numerous locations, some of its landlords have filed lawsuits. In one case, GFP Real Estate alleged the company owed more than $740,000 in rent at 40 Exchange Place in Lower Manhattan, and as of July, had not paid rent since April.
Knotel reportedly wants to raise $100 million in new funding at a price that would slash its most recent August 2019 valuation of $1.6 billion in half. The company has also put about 375,000 square feet of space across 10 Manhattan locations up for sublease.
[BI] — Georgia Kromrei