SoftBank-backed office sharing start-up WeWork has posted a first quarter net loss of $2.06 billion, as it was hit by restructuring charges while it prepares to go public through a merger with a blank cheque firm.
WeWork said its business was recovering as more people returned to offices due to the easing of Covid-19 curbs, after work-from-home arrangements last year weighed heavily on the company by reducing occupancy and increasing operating costs.
Total occupancy ticked up to 50 per cent in the first quarter compared to 47 per cent in the fourth quarter of last year, the company said.
WeWork in March agreed to go public through a merger with BowX Acquisition, a special purpose acquisition company, in a deal that valued it at $9bn. SoftBank said it would retain a majority stake in the company after the merger.
The company, whose attempt at an initial public offering in 2019 spectacularly imploded due to investor concerns over its business model and co-founder Adam Neumann's management style, said first-quarter revenue nearly halved to $598 million from a year ago.
WeWork said it had 490,000 members in the first quarter, compared to 693,000 in March last year.
The company said it incurred restructuring costs of $494m, driven by non-cash SoftBank stock purchases and a settlement with Mr Neumann, the company's former chief executive. It posted an impairment charge of $299m partly due to an exit out of some real estate.
SoftBank and Mr Neumann reached a settlement in February ending a legal battle that started in 2019 when SoftBank agreed to buy around $3bn in WeWork stock belonging to Mr Neumann and other employees, but later contested its obligation to purchase the shares.