Symbol of faults in the new economy, WeWork plays big in the coronavirus crisis

The offices of WeWork, in New York. David Dee Delgado / AFP

In the face of the coronavirus epidemic, the same is true for people and businesses: the most vulnerable are in danger. As such, WeWork, the giant of shared workspaces, knows it is threatened. Since its IPO aborted in late September 2019, due to questionable accounting which saw its valuation, a time estimated at almost 50 billion dollars (45 billion euros), collapse, the New York company is a patient at risk. And the last few days have shown that his diagnosis was not encouraging.

Read also Japanese tech giant Softbank collapses on Tokyo Stock Exchange

His reaction to this episode of crisis did not reassure him further. Despite the safety instructions issued, especially in New York, the company decided to keep its spaces available, arguing that these were priority infrastructures. "Some of our members are counting on us to stay open so they can continue to generate income, so they can pay their employees and serve their customers", she said in a statement. In support, it produced testimonies from entrepreneurs thanking the company for allowing access to its offices. It also offered a bonus of $ 100 per day to encourage its employees to come and work physically on the premises … despite the users' flight.

A financially cornered society

"There is no way to respect (safety distances) ", said one of the company's customers in the New york post, while complaining about having to pay his rent under these conditions. A petition has been launched to this effect. "As a small business owner, I can't afford to pay for services I don't use", explains its initiator, Jill Raney, who reminds in passing that the company offered a golden bridge to its founder, Adam Neumann, to land him in September 2019. "Large companies like WeWork are absolutely capable of (find) money both to pay their employees and to suspend membership fees ", she asserts.

Read also WeWork, a sinking coworking company, saved by the Japanese bank SoftBank

A request probably too heavy to assume for a financially cornered society. She is said to have spent $ 1.4 billion in the past three months, an amount that worries observers about her liquidity. The consequences of the coronavirus epidemic have increased "The pressure on the long term viability of the company", estimates the S&P agency, which downgraded the company's debt rating a week ago.


Please enter your comment!
Please enter your name here