November 5, 2019 / 8:00 PM / 11 days ago

Factbox: How to fix WeWork: rivals say what they would do

NEW YORK (Reuters) - Office sharing company WeWork is being rescued by its largest shareholder, SoftBank Group Corp (9984.T), with a $9.5 billion injection of funds but it still faces a very difficult road to survival given its large losses, and property lease liabilities.

FILE PHOTO: The WeWork logo is displayed outside of a co-working space in New York City, New York U.S., January 8, 2019. REUTERS/Brendan McDermid

Reuters asked some of its rivals what they would do to turn the company around if they were running WeWork. Here are some of their answers:

Ryan Simonetti, co-founder and CEO of Convene:

“First is rebuild trust with your people... really start to lay the foundation of a new type of culture.”

“There are tough decisions that have to be made, you have to have a path where you can finance the business and become profitable. Look for a more partnership-oriented approach with tenants and landlords.”

John Arenas, CEO of Serendipity Labs:

“I would look at all the opportunities for reducing long term liabilities through negotiations or otherwise.”

“I would rebuild the culture from scratch. In the long run, ensuring that humility, respect, transparency and trust are core values of the company culture, together with commitment to delivering on brand promises, enables the creation of value and development of a competitive advantage.” 

Jamie Hodari, CEO of Industrious:

“I think WeWork has a lot going for it, and it would probably be a mix of slowing growth, really focusing on getting unit performance to something healthy and formidable so they can sell it into a management contract business.”

“You can franchise McDonalds, but... (co-working) is a different level of integration with the customer. It doesn’t lend itself to having 70 different owners.”

Joshua White, managing director at MakeOffices:

“You’ve got to pare down the organization to laser focus on the thing that you’ve been able to generate revenue on. Switch from growth at all costs to profit at all costs; that will be very difficult for WeWork... there are nine months of expenses on leases that were already signed. You can’t unwind that.”

“The other work that needs to happen is decrease spending. That needs to happen faster than it is going right now.”

“I would accelerate divestitures and trim headcount alongside non-strategic personnel and departments. It’s a very top heavy organization. Then go back to negotiate with the landlords.” 

Reporting by Carrie Monahan and Sheila Dang; Editing by Martin Howell and Rosalba O'Brien

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