After aggressive cost-cutting measures, together with mass layoffs and promoting a number of of its companies, WeWork’s chairman expects the corporate to have constructive money circulate in 2021. Marcelo Claure, who turned WeWork’s chairman after co-founder Adam Neumann resigned as chief govt officer final fall, informed the Financial Times that the co-working house startup is on course to satisfy its purpose, set in February, of reaching working profitability by the tip of subsequent yr.
Claure can be chief working officer of SoftBank Group, which invested $18.5 billion within the co-working house, in line with leaked feedback made by Claure throughout an October all-hands assembly.
SoftBank stated in April that it will lose $24 billion on investments, with one of many major causes being WeWork’s implosion final yr. The firm’s monetary and administration points introduced its valuation down from as a lot as $47 billion originally of 2019 to $2.9 billion in March, in line with a May report by CNBC.
In addition to the layoffs, WeWork offered off companies together with Flatiron School, Teem and its share of The Wing. Claure informed the Financial instances that WeWork additionally minimize its workforce from a excessive of 14,000 final yr to five,600.
Neumann resigned as CEO in September, reportedly on the behest of SoftBank, over considerations in regards to the firm’s monetary well being and his conduct. Then the corporate postponed its IPO submitting. The subsequent month, SoftBank took possession of WeWork as a part of a financing package deal.
Claure is credited with orchestrating a turnaround at Sprint, slicing losses and growing its inventory value in 2015, three years after it was acquired by SoftBank. He has served as SoftBank Group’s COO since 2018.
Despite the affect of the COVID-19 pandemic, which compelled many individuals to earn a living from home, Claure stated that firms have been leasing areas from WeWork to function satellite tv for pc places of work near the place staff reside. But he additionally stated that revenues had been flat throughout the second-quarter as a result of many tenants terminated their leases or stopped paying hire.