Jahanshahi is the sort of member Claure has
vowed not to alienate, promising employees
at a meeting last month that he would be
“maniacally crazy focused to make sure that
the experience that we offer our members is
second to none.”
“There’s nothing more that I want than to
prove all of the detractors that are writing
articles about us that they’re completely
wrong, that there’s magic to this business,”
Claure said, according a transcript of the
meeting published by Recode, which WeWork
confirmed was accurate.
The road to profitability remains a herculean
challenge for a company that was posting up
nearly $2 billion in losses a year. A $9.5 billion
bailout from Softbank saved WeWork from
possible bankruptcy, but the company now
needs to reduce its reliance on venture capital
and acquisitions that accounted for most of its
explosive revenue growth.
WeWork is saddled with $47.2 billion in future
lease obligations, and the cost of building out
newly acquired spaces. The company is locked
into mostly 15-year leases that are difficult to
renegotiate, with rates expected to rise over
time. Adding to that, WeWork is temporarily
not paying rent on many locations under deals
the company has negotiated with landlords.
Those rent-free periods are set to expire in the
coming months, meaning WeWork will have to
start paying that rent.
Experts and people in the industry are
skeptical that WeWork can achieve
meaningful cost reductions without
somehow squeezing tenants.