WeWork to exit 40 locations to cut costs
- By Reuters -
- Nov 10, 2022
WeWork said on Thursday it will exit about 40 locations across the United States and forecast current-quarter revenue below estimates as the flexible workspace provider faces high expenses and a strong U.S. dollar.
The company has been working to curb its real estate footprint and reduce headcount as it grapples with long-term lease obligations that stood at $15.57 billion as of September-end. Some of WeWork’s tenants, in contrast, are only on short-term leases.
WeWork went public in 2021 after a two-year struggle and currently has a market cap of around $1.77 billion. Its pre-IPO valuation was once pegged at nearly $50 billion.
Its shares were down 1.6% at $2.39 in premarket trade on Thursday.
The closures, of about 41,000 workstations, are expected to pull down revenue but the simultaneous cost reductions will contribute roughly $140 million to annual adjusted core earnings, it said.
The company did not disclose which U.S. locations it would exit.
The New York-based firm also reported third-quarter revenue of $817 million, below market expectations of $865 million, according to a Refinitiv poll of five analysts.
Net loss per diluted share came in at 75 cents per share, below estimates for a loss of 45 cents.
WeWork expects fourth-quarter revenue to be between $870 million and $890 million, below expectations of $923.8 million.
The company also said it extended the maturity date of its $500 million senior secured notes from February 2024 to March 2025. The notes remained undrawn at the end of the quarter.