Photo by Artem Beliaikin on Unsplash Production of boiler chickens (those raised for their meat, not eggs) in the US...
Does WeWork Work?
Office space rental company WeWork reported a loss of $803 million for the fourth quarter of 2021. This puts their total loss for the year at $4.4 billion, after losing more than $3 billion in each of the two prior years. Despite this reported loss, the company’s stock price rose slightly after the news, although the stock price is down more than 35% since it went public in October 2020. The company expects revenues to rebound in 2022 as more professionals begin returning to offices and meeting in person. For the last quarter occupancy rates rose to 63%, up from 56% the previous quarter. While revenues are expected to rise in the future, it is uncertain when the company expects to post a profit, and whether WeWork’s business model will actually work.
Discussion Questions:
- What might be some of the inputs that WeWork would consider its fixed costs and variable costs?
- Explain why the company does not simply shut down instead of losing billions of dollars each year.
- In the long-run, what must the company do to become profitable?
Sources| The Real Deal: WeWork’s losses narrow but are still huge; Barron’s: WeWork’s Quarterly Loss Narrowed as Revenue Increased; Photo by Brandon Hooper on Unsplash
