WeWork said Thursday that it was going to close roughly 40 “underperforming” locations in the United States and tempered its revenue forecast for the year, highlighting the challenges the co-working company still faces after its near collapse and subsequent bailout in 2019.
In reporting its third-quarter financial results, WeWork said it lost $568 million in the period, an improvement from last year’s third quarter, when it lost $802 million. Revenue of $817 million in the latest quarter was more than 20 percent higher than the $661 million reported a year earlier.
WeWork doesn’t own its buildings but leases office space and parcels it out to its members, which are individuals, small businesses and larger companies. Memberships rose in the third quarter and occupancy edged up in WeWork’s 647 consolidated locations around the world.
The company said it expected revenue of $3.35 billion to $3.37 billion this year. The upper end of that forecast is lower than last quarter, when the company projected as much as $3.5 billion in revenue for 2022. One factor leading to the pared back forecast, the company said, was “slower than expected growth” in its operations in the United States, Canada and Japan.
WeWork said the closing locations would likely reduce revenue but would benefit the company by cutting costs. The company has lost over $12 billion since the end of 2018.
WeWork’s stock has lost three-quarters of its value since the company went public last year, making it worth $1.9 billion, a fraction of the $47 billion value that investors placed on the company in 2019.
SoftBank, the Japanese conglomerate and a fund run by SoftBank, have provided billions of dollars in financing to keep WeWork afloat, and now own nearly two-thirds of the company.
Despite its progress cutting expenses and getting out of leases, WeWork is still using up large amounts of cash.
In the first nine months of the year, WeWork consumed $915 million of cash investing in and operating its business, leaving it with $460 million, down from $625 million at the end of the second quarter.
If WeWork needs more money, it could draw on roughly $1 billion of financing backed by SoftBank. On Thursday, WeWork said it had extended the date at which it would have to pay back $500 million of that financing, to 2025 from 2024, a move that buys the company more time to try to generate positive cash flows. WeWork has not borrowed from the $500 million facility.
In a sign of its scaled back ambitions, WeWork recently reduced its space at Dock 72, the trophy Brooklyn building it helped develop.