It has been a bit of a rollercoaster year for WeWork. The firm which specialises in co-working spaces across the globe had initially planned an IPO earlier in the year, but a deeper look at the firm’s financials, as well as some erratic behaviour from its CEO, has seen the company’s value sink heavily.
It recently got a life vest in the form of an investment from SoftBank, which saw the Japanese company obtain a controlling interest in WeWork, and now the hard work begins in turning the firm profitable.
According to a report initially shared by CNBC at the weekend, that plan will involve three simple steps, the most telling of which is a divestment in all non-core businesses that WeWork has an interest in.
As such there are going to be a few casualties in the divestment process, with WeWork noting the following companies that will be let go:
- Managed by Q
- Space IQ
- Wave Garden
- The Wing
The spectrum of companies above is rather broad, with many focusing on solutions for office spaces, but a couple out of left field, such as Wave Garden which makes wave pools utilising atrifical intelligence. As such you can see that WeWork’s investment strategy prior to its most recent woes was quite diverse.
Moving forward it looks like the firm will focus on what it does best – office space. This is a good thing for South Africa, with the company having opened up a property in Rosebank a few months ago, and readying another location in Sandton and Cape Town for later this year.
What the company’s larger plans for SA are, remains to be seen, but it looks like the core aspects of the business will remain intact, although there are still concerns that several hundreds of employees will be the collateral damage.
Also unclear at this stage is how quickly SoftBank can turn things around, and should it do so, whether another stab at an IPO is on the cards.[Image – Photo by Ariann Laurin on Unsplash]