The financial resulted of WeWork are not at all encouraging as the company added another $1.25 billion loss in the third quarter of 2019. The loses almost doubled from the same quarter last year. According to analysts and experts all this was caused due to the heavy spending spree of the company and its expansionist policy along with launching its IPO which was later cancelled.
Although revenue grew from $ 482 million a year earlier to $ 934 million this year was not enough to save the company due to the gigantic losses it had suffered.
In an email to staff, the company’s co-executive officers Artie Minson and Sebastian Gunningham said that the company was finding out a plan to reduce the expenses and increase profitability. The company might have to sell off its assets and cut jobs to achieve this. Sources close to the company say that dismissals have already begun and are expected to rise in the next few days and could number in thousands.
The company had always prioritized growth above profit and when it was decided that the company would launch an IPO it started to expand its business. The plan was to raise around $9 billion in equity and debt. WeWork started filling up office space and more than 115,000 desks were added in the record a record for the company.
But soon it realized that it was in deep trouble due to a high mismatch in its finances. The rising cost had suddenly ballooned up and the company started suffering heavy losses. The investors started to lose faith in the organization due to the lack of top management to deal with the situation. Amongst all these, the CEO Adam Neumann was ousted from the company by its investors and it cancelled its plans for the IPO at the last moment.