WeWork will offer more flexible options to tenants in the UK seeking to split work between homes and offices alongside launching a new fund to help smaller businesses hit by the pandemic.
As part of a wider strategy to attract workers back from their homes, the shared office provider has earmarked £15m to subsidise rents for struggling SME tenants and provide free mentoring and education opportunities in London and other cities to help smaller businesses recover.
WeWork lost more members from SMEs than larger enterprises during lockdowns last year, although the company said that start-ups had proven the keenest to return. Small businesses often lack the deep pockets of their larger rivals to withstand months of forced economic shutdowns.
Companies have signalled that the pandemic is likely to mean permanent changes to ways of working, with greater flexibility expected over where and when people will work in offices in particular.
WeWork is preparing to adapt its own flexible office options as a result, said Mathieu Proust, general manager for WeWork UK, Ireland and Emerging Markets, who predicted that a “new breed of entrepreneurs” would come out of the pandemic.
WeWork is also planning to launch an “all access” pass as a monthly membership, meaning businesses will be able to work in any location. This is designed to also help companies better understand how their employees are using workspace to define longer-term real estate strategies for after the pandemic.
Freddy Kelly, chief executive of Credit Kudos, which has signed up to benefit from the SME fund programme, said that “as a rapidly growing company, it’s important to have a flexible workplace that can adjust to our evolving needs”.
Proust said that more customers wanted to shift from a single large office to a “hub and spoke” approach involving a central London site with other bases nearer workers’ homes. This option is available under WeWork’s new “growth campus” SME initiative.
He added that the company was looking at bringing a service for universities to the UK that would allow students to work from its shared space — tapping into the prediction that learning will become more remote after the pandemic. This was already popular in the US, he added.
WeWork is also looking at rejigging some of its own offices with more collaboration spaces, he said, and is talking to gyms and coffee shops about partnerships to tempt people back.
Analysts say that WeWork’s portfolio is heavily focused around London and other big city centres — areas hit hard by companies closing offices in the pandemic — making it dependent on the rapid return of white-collar workers currently staying home.
Proust said that WeWork had looked at the UK portfolio over the past few months and were “overall very happy” with the size and locations. “We believe in city centres,” he added.
WeWork typically offers much shorter lease terms than traditional real estate owners, which has meant that tenants have been more easily able to leave during lockdowns. WeWork says it offered concessions to tenants that needed help without specifying what these were.
In 2019, WeWork was forced to end plans for an initial public offering and the pandemic has exacerbated pressure on the lossmaking company. It burnt through a further $517m in cash in the third quarter, although this was less than half the $1.2bn lost in the same quarter a year earlier.
WeWork told the FT that efforts to become a “more streamlined, cash-conscious organisation” have included divesting non-core ventures, as well as cutting back its global portfolio and reducing costs. Chief executive Sandeep Mathrani told Reuters in January that the company was “on track” to reach profitability by the fourth quarter of this year.