SoftBank-backed office-sharing startup WeWork reported a net loss of $ 2.06 billion in the first quarter on Thursday as it faced restructuring costs as it prepares to pass through a merger with a blank check company To go stock market.
WeWork announced that business has recovered as more workers returned to offices due to the easing of COVID-19 curbs after work-from-home agreements last year reduced the company’s occupancy and had a heavy burden from the increase in operating costs.
“WeWork continued to see encouraging signs of a recovery in sales activity, a critical indicator of future sales, which grew in the first quarter as the company had gross sales of 24,000 in January, 25,000 in February and 38,000 in March,” the company said said in a statement.
The company, whose attempt to go public in 2019 spectacularly imploded due to investor concerns about its business model and the leadership style of co-founder Adam Neumann, said first-quarter revenue nearly halved to $ 598 million a year earlier.
WeWork said it had 490,000 members in the first quarter, compared to 693,000 in March 2020.
The company said it incurred $ 494 million in restructuring charges related to SoftBank non-cash stock purchases and a deal with Neumann. An impairment loss of $ 299 million was recorded, partly due to the exit from some properties.
SoftBank and Neumann, the former CEO of WeWork, reached an agreement in February and ended a lawsuit that began in 2019 when SoftBank agreed to buy approximately $ 3 billion worth of WeWork shares from Neumann and other employees , but later denied his obligation to purchase the shares.