WeWork’s Recovery Slowed By Delta Variant As Its Quarterly Revenue Declines

A decline in its revenue for the second quarter was reported by the United States based office-sharing startup WeWork with the emergence of the Delta variant of the coronavirus slowed down the recovery of the company in the first half of the year.  

The on-going pandemic re-emergence in parts of the world brought down the company’s expectations for a rebound in average revenue per memberfor 2021 and 2022, said the company which is backed by Japanese conglomerate SoftBank Group Corp. The company now expects a slow recovery of its business particularly in the United States and Canada for the period.

Worries for office space providers have been compounded by the fast-spreading Delta variant and the consequent re-imposition of curbs and restrictions in some parts of the world with businesses choosing to go for shorter leases while many employees still continue ot work from home.

WeWork said it had 517,000 members in the second quarter ended June 30, a drop from 612,000 in the year-ago period.

The company said its business and sales would improve by the hybrid work strategy being adopted by many companies and added that it expects preliminary July revenue to come in at about $215 million while it forecast sale revenues of between $650 million and $700 million for the third quarter.

The hybrid work regimen allows workers to operate from different spaces – including corporate offices, coworking spaces, public areas and from home.

In April this year, WeWork decided to to go public through a merger with BowX Acquisition Corp, a special purpose acquisition company, in a deal that valued it at $9 billion. A majority stake in the company would be retained by SoftbBank even after the merger, the Japanese conglomerate said.

Net loss attributable to WeWork was $888.85 million in the second quarter, compared with $863.83 million a year earlier.

The company also reported an almost 1 per cent quarter on quarter decline in its profits for the quarter at $593.48.

(Adapted from USNsnews.com)

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