As the pandemic rages on, IWG will reserve an additional £160 million to cover the costs of leaving behind office space.
Office vacancy rates have skyrocketed over the last year, which has hurt rent costs. This has been detrimental to the flexible workspace industry, which operates on short-term leases.
The £160 million reservation is in addition to the £156 million the company set aside in August when it announced it would commit to closing 120 offices. This time, IWG said it could close over 100 unprofitable offices.
“It’s a very difficult situation, but we have to manage the costs or close centres,” said Mark Dixon, CEO of IWG.
Dixon added that the money was intended to be used towards “future closures, not necessarily for closures we are going to do tomorrow.”
The company is also in the midst of negotiations with landlords in an effort to get more beneficial terms.
Last year, IWG declared its Jersey-based subsidiary Regus insolvent, which ended nearly 800 lease agreements that were in the pipeline.