WeWork is also suing people over back rent.
The company’s first aspiration for a multibillion IPO fell apart when Adam Neumann was forced out of WeWork, the company which he founded in 2010. After a meteoric rise the entrepreneur was brought down after allegations of serious drug use and sexual improprieties were made.
And Neumann reportedly walked away with a $1.7 billion deal. So he has plenty of money to pursue other ventures.
WeWork was forced to deal with sexual harassment suits. It delayed its planned IPO and laid off many workers.
The business model of WeWork was also called into question. Making small individual leases for sharing office space does not really work at times of recession. Real estate firms actually own the buildings in which they lease office space. And their clients have long term leases which must be held through any time of recession.
While work from home has become the go-to work style for most businesses due to COVID-19, many employees are starting to see a significant decline in their productivity levels and an increase in distractions and lack of focus. #wework https://t.co/xC3vUXTERe
— WeWork (@WeWork) October 24, 2020
Bloomberg reported that WeWork CEO Sandeep Mathrani told reporters in a video call, “I’m a big believer in one step at a time so let’s hit profitable growth first, and we’ll then revisit the IPO plan.”
He also stated that the company has completed the necessary fixes to steer it in the right direction and that WeWork should become profitable in 2021. These fixes included layoffs and the selling of assets.
And now the company is threatening legal action against tenants who owe back rent. The Corona Virus shutdowns left many small businesses broke and unable to pay their bills. While WeWork had at first been more lenient due to the situation, it has now decided to take a tougher stance on rent delinquencies in a move to increase its revenues.
And the Financial Times reports that SoftBank head Masayoshi Son had instructed subordinates to find reasons not to make payments of up to $3 billion to WeWork shareholders.
He sent one message saying, “It’s great to postpone the close of tender [beyond an initial February 28 deadline]. Use whatever excuse to make senses [sic].”
The revelations came as a result of a lawsuit against the company was filed by Adam Neumann and other WeWork investors.
Read more about: WeWork