WeWork will generate cash next year, chairman says

Marcelo Claure says the company will stop burning through its cash pile one year earlier than forecast

A pedestrian walks past the entrance to the We Work co-working office space, operated by the parent company We Co., on Eastcheap in London, U.K., on Monday, Oct. 7, 2019. While WeWork has been rapidly expanding in Canada, the New York-based company is facing challenges on multiple fronts with Landlords in London and New York the most exposed to any further deterioration at the co-working firm. Photographer: Bryn Colton/Bloomberg

WeWork executive chairman Marcelo Claure said the office-sharing company was on course to have positive cash flow in 2021, a year earlier than a target the company set in February, the Financial Times reported on Sunday.

Mr Claure, in an interview with the newspaper, said WeWork has seen strong demand for its office spaces since the start of the coronavirus outbreak.

The SoftBank-controlled company has also reduced its workforce by more than 8,000 people, renegotiated leases and sold off assets to reduce its cash burn and shed costs, the FT said.

New York-based WeWork is currently in the middle of executing a five-year turnaround plan set out this year and is shaking up its top management ranks under Mr Claure.

The plan included a target of reaching operating profitability by the end of next year and Mr Claure said that WeWork remains on track to meet it.

"Everybody thought WeWork was mission impossible," Mr Claure, who is also a SoftBank executive, was quoted as saying by the FT. "And now, a year from now, you are going to see WeWork to basically be a profitable venture with an incredible diversity of assets."

WeWork told Reuters it did not have any further comment beyond the FT interview.

The company has gone through a tumultuous period since abandoning its initial public offering (IPO) in September. It was forced to push out co-founder Adam Neumann last year after SoftBank and other shareholders turned on him over his management style, his numerous conflicts of interest and his handling of the IPO.