What’s going on:
WeWork has forecasted revenue lower than expected for the current quarter, demonstrating that their business of providing flexible workspace is feeling the impacts of the recent wave of job cuts in the tech industry.
The company’s stocks dropped 5.5% in morning trading after their projected revenue of $830 million to $855 million fell short of analysts’ predictions of $918.4 million, according to Reuters.
Why it matters:
CEO Sandeep Mathrani stated on an earnings call that layoffs enacted by companies across the United States had an effect on certain WeWork locations.
On the upside, in December (while still deep in the red and weighed down by debt) WeWork reached an incredible milestone: their first profitable month ever.
This achievement was spurred on by increased demand as businesses contemplated what offices they need in the light of changing remote and hybrid work patterns.
How it’ll impact the future:
Although tech workers being laid off if impacting WeWork’s revenue, they still managed to have their first profitable month.
In the current economy and in the future, coworking spaces might feel the effects of layoffs more significantly than expected. If a huge part of the remote workforce is being laid off, they won’t have a need to rent a flexible office space.