WeWork executive chair stands 100% behind decision to stay open during coronavirus
WeWork’s buildings are open for business amidst the coronavirus, and that is unlikely to change for the foreseeable future.
“I gather that the decision to stay open has been a highly debated one but I stand 100% behind this management decision. In fact, every decision that has been and is being made has been very thoughtful,” said WeWork executive chairman Marcelo Claure in prepared remarks to employees, obtained by Yahoo Finance, at a virtual town-hall on Tuesday. “We are minimizing the impact on our employees. And we need WeWork to continue to be ready for the future.”
WeWork operates more than 730 locations around the world. During the coronavirus, WeWork has handed out bonuses to employees as an incentive to continue showing up to work.
Claure discussed more broadly with employees Tuesday the current state of Corporate America and how it may emerge post the height of the coronavirus. He doubled down on his view that an overhauled WeWork — though still struggling with losses and high cash burn — will come out the other side.
Said Claure, “COVID-19 is reshaping the world — how normal is defined and how business is conducted. But everyone at SoftBank, everyone on this management team and I — we are tremendous believers that the WeWork value proposition is now stronger than ever before. We are the absolute market leader. We have scale that no one else has. Space-as-a-service is not going away. The needs of our customers might change. They might need more space. They might require more flexibility. But people will still need a place to work.”
In this Feb. 27, 2020, photo, people work in the shared space section of one popular WeWork location in Tokyo. Japanese technology company SoftBank Group Corp. called off its offering of up to $3 billion worth of shares in office-space rental venture WeWork, though it remains committed to its $5 billion bailout of the financially troubled company. (AP Photo/Yuri Kageyama)
Claure also sought to assure employees that backer SoftBank remained committed, despite its recent decision to pull its $3 billion tender offer for shares. But Claure did hint at further cost reduction efforts.
“We have the required liquidity to weather this crisis. We have SoftBank 100% behind us. And SoftBank is totally determined to make sure that WeWork will emerge and succeed. However, make no mistake that this will require us to make big sacrifices. Accelerate our cost reduction programs. And be a much more nimble organization.”
Added Claure, “We are going to become adjusted EBITDA profitable and free cash flow positive for the first time in WeWork’s history. We have a clear line of sight to our goals.”
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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