Coworking Group Is Slashing 300 Jobs
WeWork, the global flexible space provider, is cutting staff globally.
The New York-based company said in a statement today (19 January) ahead of its upcoming earnings call that it plans to axe about 300 roles globally to cut costs as high inflation weighs on company spending on offices.
WeWork said in a brief note that its preliminary numbers show the company made gains in revenue and adjusted earnings before interest, taxes, depreciation and amortisation through the final quarter of 2022, exceeding the guidance provided in its third quarter 2022 earnings call.
But it said that in connection with its “portfolio optimisation” and in continuing to streamline operations, it is pursuing “headcount reductions” which will account for around 300 roles in its global workforce. This is understood to affect around 10% of its UK workforce. It employs 500 staff in the UK and operates 50 locations in London, four in Manchester and one in Cambridge and Birmingham.
In November of last year, WeWork said it was closing 40 US underperforming shared office locations while at the same time seeking to take advantage of growing global demand for flexible workplaces in a bid to turn profitable.
Fitch Ratings downgraded the group in December on concerns over the effect of the global economic slowdown on demand for offices. The downgrade was issued in the context of WeWork’s tentative but continued move to profitability following a tumultuous few years with a failed first attempt at a public listing and the global lockdowns imposed during the pandemic.
The job cuts come as it has signed to increase the space it occupies at 123 Buckingham Palace Road next to London Victoria station. The company will occupy the building’s fifth floor, comprising 30,000 square feet, in addition to its existing space on the second and fourth floor, which WeWork has operated since 2018.
The group said the expansion, due to open later this year, will meet the “unwavering demand from companies, particularly enterprises with large workforces, who continue to seek class-A, flexible workplace solutions in well-connected locations across the capital”.
WeWork says that in 2022, 123 Buckingham Palace Road was the second most popular location for its All Access bookings, behind WeWork’s flagship location at 10 York Road, Waterloo. And over the past year, the company saw WeWork All Access bookings at 123 Buckingham Palace Road increase by 59%.
The letting is its first new lease in the capital for four years.
Peter Greenspan, global head of real estate, WeWork, said in a statement: “This expansion underscores the strong demand we’re experiencing from companies who are opting for commute-worthy workspaces that cater to employees’ shifting priorities, as they weigh up travel time with what they want to get out of their office visit. This is a strong indication of how workers are now thinking about the office – our most sought after locations are those within walking distance of major transport hubs, such as 123 Buckingham Palace Road, which is consistently one of our most popular in London.”