WeWork is a non-residents UK formation company that was formed in America. It deals in real estate and has gained popularity all over the world because of the innovative concept it brings.
How Does It Work?
The company is an office-renting organisation that has leased office spaces to many non-residents companies and residential companies. It earns money by leasing space for the office. WeWork buys a few floors in different buildings of offices and converts them into the workplace for smaller offices. It then rents these work areas to people who want to enjoy the luxuries of a full-fledged office without having to pay for the expenses of one.
Who Are The Clients?
People who need such offices include freelancers and telecommuters such as non-residents of the UK who sometimes need a temporary office in the UK where they could work. These mini offices supply Wi-Fi as well for them to do their work without any interruption to meet their deadline. Some other clients include new small-scale businesses that need a place to occasionally hold their meetings without having to bear high costs of having a fully functional office.
Is WeWork Going To Be Around Much Longer?
According to many reports, the famous leasing company is not going to last around much longer because it got its IPO canceled and during the valuation process, its value fell by 90%. Also, due to the ongoing pandemic, people are not much looking forward to leasing office spaces for themselves any longer because they prefer to work from home. After this huge loss, the company tried to stabilise itself by firing about four thousand employees to reduce the cost. So, what led this famous company with a great concept of leasing sub-offices to the brink of failure? Few reasons are discussed below.
Too Much Loss Of Money:
WeWork started with the idea that facing losses in the initial stages of a business is acceptable to attract the customers but, it faced a ridiculously large amount of loss of up to a billion dollar in the year 2019 which was too much to recover.
The Company Was Confused As A Tech Company:
Although many of the clients of WeWork belong to the technology sector doesn’t make the company itself a Tech Company. This confusion led to many problems during the valuation process because a leasing company can never achieve the profit margins of a tech company and thus, the valuation decreased.
Unnecessary Re-Branding:
Re-branding was not a good idea for WeWork during the ongoing losses it had to face. The company changed its brand from WeWork to The We Company which completely distorted the core message and objective of the company in the first place.
So, with the ongoing crisis that the company is already facing, it seems a bit difficult for this non-residents UK formation company to survive in the ongoing pandemic due to less demand for sub-offices as most people are working from their homes.