WeWork on track to turn profitable and will revisit plans to go public

WeWork is considering making a second attempt at going public after the business reaches profitability in 2021, its chief executive has said. Sandeep Mathrani, who joined the office space rental business in February, told Bloomberg that the business is on track to become profitable next year after it laid off […]

WeWork is considering making a second attempt at going public after the business reaches profitability in 2021, its chief executive has said.

Sandeep Mathrani, who joined the office space rental business in February, told Bloomberg that the business is on track to become profitable next year after it laid off around a third of employees.

“I’m a big believer in one step at a time so let’s hit profitable growth first, and we’ll then revisit the IPO plan,” he said.

Mr Mathrani said the company does not have any plans to lay off more staff, saying that WeWork is “100pc done with rightsizing.”

The business saw occupancy rates of 66pc in the first three months of 2020, according to its chief executive. “With the cost cuts that would be where we see cash coming in,” he said. “We will get to that level by next year.”

WeWork originally planned to go public in 2019 but abandoned the attempted float after investors criticised its finances. 

Scrutiny over the company’s business model and personal links to WeWork’s finances led to the departure of the company’s original chief executive Adam Neumann.

WeWork had planned to float in New York with a valuation as high as $47bn (£36bn). However, repeated writedowns in its valuation as well as the impact of the coronavirus pandemic have led to the company most recently being valued at $2.9bn.

Marcelo Claure, WeWork’s executive chairman, told employees last year that there was “zero risk of the company going bankrupt” and vowed to deliver “one of the most amazing comebacks in history.”

Mr Mathrani told Bloomberg that he still communicates with his predecessor despite an ongoing lawsuit filed by Mr Neumann against WeWork’s main investor SoftBank over a scrapped $3bn stock buyout agreement.

“We chitchat twice a month and the conversation is about the business,” Mr Mathrani said. “He wants to know what I’m doing.”

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