The news was announced in WeWork’s second-quarter earnings memo, which was emailed to employees on August 13 and obtained by. During the quarter, the company’s revenue rose 9% as compared to the same period last year, to $882 million, though it burned $671 million in cash. Its revenue in the first quarter had topped $1 billion.
“The numbers illustrate that similar to virtually every company around the world, COVID-19 has had an impact on our business,” Kimberly Ross, WeWork’s chief financial officer, said in the email. “However, they also show our five year plan in action,” she said. WeWork now finds itself at an inflection point, caused not just by the impact of the Coronavirus, but by the legacy of Neumann, who was pushed out as CEO last fall.
The financing may alter allegiances in Neumann’s war with SoftBank. “As an observer, I think it actually weakens Neumann’s position,” says Poleg. “He was in a sense in the same boat with some of the venture investors that wanted to cash out.” Now, by giving the company access to new capital, SoftBank is positioning itself as a potential savior and critical ally—though the conglomerate is of course protecting its own WeWork investment as well.
Going forward, WeWork will need to prove itself as a sustainable business, one that can justify even its current,
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