After aggressive cost-cutting measures, including mass layoffs and the sale of many of its businesses, WeWork’s The president expects the company to have positive cash flows in 2021. Marcelo Claure, who became president of WeWork after the resignation of co-founder Adam Neumann as head last fall, told Financial Times that the co-working space start-up should reach its goal. target, set in February, to achieve operational profitability by the end of next year.
Claure is also chief operating officer of the SoftBank group, which invested $ 18.5 billion in the co-working space, according to comments made by Claure during an open-ended meeting in October.
SoftBank said in April it would lose $ 24 billion on investments, one of the main reasons being the implosion of WeWork last year. The company’s financial and management problems reduced its valuation from $ 47 billion in early 2019 to $ 2.9 billion in March, according to a report released in May by CNBC.
In addition to the layoffs, WeWork has sold companies like Flatiron School, Teem, and its share of The Wing. Claure told the Financial Times that WeWork also cut its workforce from 14,000 people last year to 5,600 people.
Neumann resigned as CEO in September, apparently at the request of SoftBank, for reasons of financial health and corporate behavior. Then the company postponed its stock market filing. The following month, SoftBank took over WeWork as part of a financial package.
Claure is credited with orchestrating a turnaround at Sprint, reducing losses and increasing its share price in 2015, three years after its acquisition by SoftBank. He has been COO of the SoftBank group since 2018.
Despite the impact of the COVID-19 pandemic, which forced many people to work from home, Claure said companies are renting space from WeWork to act as satellite offices near employees’ homes. But he also said revenues were flat in the second quarter as many tenants ended their lease or stopped paying rent.