WeWork has reported a net loss of USD 2.1 billion in the first quarter of this year. According to the documents of the office sharing startup, work from home and lockdowns because of the coronavirus pandemic led to the sharp increase in the loss of the company. The losses sharply increased from USD 556 million in the first quarter of 2020, during which there was a mild impact of the coronavirus pandemic. Loss of around 500 million was only because of the settlement with ousted founder Adam Neumann. According to documents shown to prospective investors, the loss incurred by the company this is year is over and above it lost USD 3.2 billion in 2020.
The quarterly revenue of the company fell around 50 per cent year-on-year. It has lost around 200,000 customers in the past year. The number of WeWork members has fallen to 490,000 from 693,000 in March last year. Another reason behind the huge loss is the cost of restructuring and other related things. The total cost increased to USD 494 million in the first quarter. It was just USD 56 million in the first quarter of 2020. Meanwhile, WeWork has been steadily pulling out of unprofitable locations. The latest data suggest how many challenges the company is going to face in attracting new investors. The company has been telling prospective investors that the revenue will increase manifold by 2024. It has projected the revenue figure of USD 7 billion by the end of next three years.
Meanwhile, WeWork is contemplating going public for the second time. In the run-up to the first attempt of going public in 2019, WeWork spent a huge amount of money in taking leases in prime office buildings in major cities like New York and London. SoftBank, which is the main investor in the startup, invested billions of dollars during the period. This led to USD 47 billion valuations of the company. But it tumbled drastically after its heavy spending and consistent losses were scrutinized by investors. Ultimately the company dropped the planned IPO and Neumann had to resign. WeWork is now cutting costs under the leadership of Sandeep Mathrani who replaced Neumann as the chief executive last year. The expenses have almost halved to USD 274 million now when compared to the same period last year.