Despite a near doubling in its revenue for the third quarter, WeWork's loss widened to $1.25 billion as expenses drained the company of cash
By Eliot Brown Updated Nov. 13, 2019 7:22 pm ET Office-space startup WeWork lost $1.25 billion in the third quarter as expenses far outpaced revenue growth, draining the company’s cash ahead of a bailout by SoftBank Group Corp. last month.
Behind the ballooning losses were many of the very concerns investors had with the company earlier this fall, when it attempted an initial public offering. But with the focus internally set on the top line, the nine-year-old company was never able to deliver its long-running set of pledges that it would rein in costs. Spending consistently rose, typically as fast as or even faster than revenue, as the New York company blanketed the world with glassy offices marked by a hip interior design and ample fresh cucumber water. The losses kept growing ahead of the IPO, at the very time that startups usually endeavor to show they are shrinking.
Since Mr. Neumann left in late September, the company has pivoted rapidly to try to cut costs. SoftBank installed a new executive chairman—Marcelo Claure—and it has begun to search for a new chief executive, holding talks with T-Mobile US Inc. CEO John Legere, people familiar with the matter have said.
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