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WeWork’s losses doubled to $1.25 billion last quarter


The extent of WeWork’s woes is still coming to light.

WeWork reported a net loss of $1.25 billion in the most recently completed quarter, a period of heavy spending during which the co-working company attempted to go public. That compares to a loss of $497 million in the same quarter a year earlier, according to a financial document obtained by CNN Business. The document was first reported on by Bloomberg, which said it was presented to bondholders Wednesday.

The company reported revenue of $934 million for the quarter, up from $482 million a year earlier.

WeWork declined to comment.

The financial update comes as the company attempts to forge a path forward after its disastrous IPO attempt and the ouster of its cofounder and CEO Adam Neumann. Neumann stepped down as CEO in September amid reports that some investors — including its largest, SoftBank — wanted to push him out. Meanwhile, the money-losing company needed a fresh injection of capital. Shortly after that, WeWork pulled its IPO. The situation was so bad that the company reportedly couldn’t lay off staffers as anticipated because it couldn’t afford to pay severance.

Last month, SoftBank took majority ownership (80%) of WeWork as part of a deal to pump $5 billion into the company. The Japanese conglomerate also accelerated a $1.5 billion equity investment originally due next year. The package valued WeWork at $8 billion, just a fraction of its peak valuation. Marcelo Claure, Softbank’s chief operating officer, was named executive chairman under the deal.

The financial documents showed WeWork had cash on hand of $2 billion as of September 30.

This week, news surfaced that SoftBank is searching for a new chief executive to helm WeWork. When Neumann left, WeWork installed co-president and CFO Artie Minson and vice chairman Sebastian Gunningham as co-CEOs.

Even as he was forced to step down, Neumann received a massive payout, outraging staffers nervously awaiting their own jobs’ fates.

In an email to staffers last week obtained by CNN Business, Claure said: “I do want to emphasize the business is secure.” He said the company is in the process of finalizing an updated five-year plan. Claure said that plan will be presented to WeWork’s board on November 19.

The company has said it will focus on its core co-working business moving forward, looking to sell off many of the startups it acquired over the years, as well as wind down its own business bets, including its school. In his email, Claure said layoffs will be completed in the “next several weeks.”

Article Topic Follows: Biz/Tech

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