In an effort to hang on to customers during tough times, WeWork is cutting its rents as people continue to largely work from home, according to a Financial Times (FT) report Wednesday (Oct. 14).
The Softbank-backed startup has yet to make money, and the pandemic has made matters worse. Clients across the globe have been offered discounts, at times by as much as 50 percent, FT reported. In March, Softbank slashed WeWork’s valuation to $2.9 billion.
It’s not just WeWork suffering; the entire co-working space sector has been especially hard hit by the pandemic, according to FT. In August, WeWork said sales were down 20 percent between the first and second quarters, and the company lost 12 percent of its members.
Looking to the future, however, WeWork said in a statement that it still has plans to move beyond flexible space solutions. The company launched Business Solutions to enhance its payroll and healthcare offerings. Its goal is to become a “true end-to-end business solutions platform” for businesses and entrepreneurs.
While the co-working sector has been fighting with landlords for discounts and forgiveness, retailers have been having more success in negotiating. Many retailers around the globe are said to be working with landlords for rent reduction. Some retailers said they threatened bankruptcy if landlords would not help. As of summer’s start, retail landlords reported only collecting roughly 65 percent of the rents due.
Earlier this month, Trish Fisher, senior director of Treasury Operations at WeWork, participated in a wide-ranging online panel discussion with PYMNTS’ Karen Webster and four other executives. They offered insight into the pain points exposed by the pandemic and also pointed to the success in implementing tech-driven solutions.
“The challenge between tech and culture and bringing the humanity back into it — it’s not just an external necessity, it’s an internal one as well,” she said.