WeWork to close 40 locations in US to reduce costs

WeWork to close 40 locations in US to reduce costs

Global flexible space provider WeWork Thursday said it plans to exit approximately 40 underperforming locations in the United States.

The closures, comprised of approximately 41,000 workstations, are mostly expected to occur in November.

”These closures are expected to reduce top-line revenue; however, they are expected to also reduce rent, tenancy and building operating expenses, and, once fully implemented, are expected to contribute approximately $140 million to annual Adjusted EBITDA,” said the company in a press release.

As of September 30, 2022, WeWork’s systemwide real estate portfolio consisted of 801 locations across 39 countries, supporting approximately 928,000 workstations and 671,000 physical memberships, equating to 72% physical occupancy, and an increase in physical memberships of 23% year-over-year.

This year, the company entered into new management and revenue share agreements as well as traditional leases for over 20 new locations globally, comprising approximately 18,000 workstations.

WeWork said revenue for the third quarter increased 24% year-over-year to $817 million.

”Systemwide revenue was $943 million in the third quarter, a 21% increase year-over-year, making WeWork the largest co-working company in the world by revenue,” the company added.