WeWork is still working, but not as it once was.
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The embattled shared workspace provider scaled back the number of buildings it leased in New York and London during the last quarter of 2019, data from commercial-property company CoStar showed. In Manhattan, it leased 64,000 square feet of space, the lowest amount in five years. And in London, it leased 49,000 square feet, the lowest since 2016.
But the slowdown in leases followed an uptick ahead of the company’s planned initial public offering, which has since been abandoned. In December, WeWork announced it opened 52 buildings across the United States, Canada Israel, China and Japan, marking a company record.
“This monthly record number of new building openings is driven by strong demand from companies of all sizes for co-working in our beautiful, functional spaces, and the flexibility of our space-as-a-service platform,” Marcelo Claure, an executive chairman at the firm, said in a statement. “WeWork continues to provide an exceptional member experience, as we meet the evolving and global real estate needs of companies across our regions.”
Lately, WeWork has been embroiled in a turbulent period that included a wave of layoffs and serious concerns about the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue. It faced criticism of its governance standards as founder Adam Neumann had 20 times the voting power of ordinary shareholders before his departure as the company’s CEO in September.
In October, major backer SoftBank rescued WeWork but dropped its valuation from $47 billion to $8 billion. A part of the deal, Neumann received a near-$2 billion payout.