WeWork is an office-sharing company that provides flexible space for entrepreneurs and small businesses. The company aims to create environments that support growth, shared experiences and true success. It provides workspaces for companies in a variety of locations across the globe, with a focus on community and collaboration. The company also offers a global network of community events.
The sexual harassment and assault allegations made by WeWork’s former CFO didn’t just happen out of nowhere. They are a direct result of the entitled, frat-boy culture that some former employees have described at WeWork. They’re a result of a system that rewards people for showing up, puts them in close proximity to executives who drink copious amounts of tequila and put huge emphasis on attending after-work parties.
But that doesn’t explain why WeWork went from investor darling to pariah in such a short period of time. It wasn’t just that the company made kooky profit projections in investor documents. It was that the losses didn’t stop at its breakneck pace of expansion.
As a real estate company, WeWork is not immune to economic downturns. It spends a lot of money on renting spaces to clients and sinks even more into cosmetic upgrades. Unlike traditional landlords who push long-term leases, WeWork encourages short-term ones, allowing its valuation to rise with every client it brings on board. WeWork’s high costs and reliance on revenue from renting space to clients means that if demand for offices falls, it will take a long time for WeWork to make up those lost revenues.
