Bloomberg: WeWork’s Path to Turnaround Challenged by Tainted ‘Cool Factor’
According to Bloomberg,
Co-working wasn’t new when WeWork came along, but the office-sharing company made it cool, enticing millennials and entrepreneurs with amenities like hip furniture, beer on tap and puppy parties.
Now, after a botched initial public offering, the ouster of founder Adam Neumann and a $9.5 billion bailout from SoftBank Group Corp., the startup faces an uncertain future as it tries to mount a turnaround with its brand tainted by weeks of financial turmoil.
In a memo to employees, Claure said WeWork has “all the necessary ingredients to make this one of the most amazing comeback stories ever, and prove our detractors wrong.”
“I know firsthand the power of the WeWork brand and the quality of our product,” Claure wrote, while also acknowledging that the company would lay off employees and “right-size” its business as it seeks to become profitable.
A representative for WeWork declined to comment.
As the company struggles to find its footing, it could focus on “asset-light” ways of expanding, such as management agreements with landlords instead of outright leases, according to Danny Ismail, an analyst at Green Street Advisors.
Still, the firm’s reputation may “negatively affect their ability to enter into those management agreements and to expand in more sustainable ways,” Ismail said.
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