In the wake of WeWork's insolvency, what does co-working look like?

 In the wake of WeWork's insolvency, what does co-working look like?

WeWork, which is almost associated with co-working, was obliged to apply for bankruptcy protection in the US, which has left its future unknown. Does coworking make it without it?

WeWork as it was is no more. The worldwide peer corporation, which was once valued at $47 billion (£38 billion), filed for Chapter 11 in New Jersey, US, on November 6. As a result of this information, the company's share price plummeted, valuing it at less than $50 million (£41 million). WeWork has started to close workplaces all across the globe, however others will stay open.

The intriguing tale of the company's development and fall, which is shown on cinema in a 2022 miniseries starring Anne Hathaway and Jared Leto, has contributed to the company's stunning collapse. Its name is quite memorable, since "WeWork" is now almost always associated with "coworking," much as "Kleenex" is with "tissue" or "Google" with "search."

With WeWork's high-profile bankruptcy, the co-working space is in disarray. Nevertheless, the office-share industry is seeing modest but historic expansion at the same time as the company's recent difficulties. According to experts, co-working will continue to be needed and desired when WeWork closes, and other companies will be prepared to seize the chance.

WeWork's shortcomings

The fact that WeWork's problems were mostly caused by its real estate assets is one of the main reasons why its demise may not have a significant impact on the co-working space. In order to provide their unique facilities and membership perks to commercial landlords, many prosperous coworking providers choose to collaborate with them in return for a fixed fee or a share of the revenue collected from membership dues. But WeWork secured a number of long-term agreements and gained direct control of all membership fees. Although the model increased their revenues, it also increased their risk.

At its height, WeWork owed almost $19 billion (£15.2 billion) to sustain 777 sites across 39 countries, the majority of which were leased for an extended period of time. The firm anticipated paying back the debt with money from member fees. But because of the epidemic, many had to cancel their memberships, which reduced the money WeWork had available to cover its rent.

However, analysts predict that WeWork will survive the COVID-19 pandemic. According to John Arenas, CEO of Serendipity Labs, a coworking space located in the US, "WeWork's business model failed, not the pandemic." "It's such a mismatch—I've experienced four recessions in this industry in 30 years—plus one pandemic, for a total of five—and one that lasts longer than a long-term lease cycle." (Arenas, who has been in the industry since the 1990s, has at least since 2014 expressed doubts about the viability of WeWork's business model.)

yearning for a peer

Notwithstanding WeWork's problems, analysts think the co-working space has a highly promising future. Colorado, United States According to Sarah Sutton, the CEO and creator of FlexJobs, shared office arrangements are more important than ever since co-working has become a commonplace kind of employment.

She claims that there was a lot of hype about the benefits of integrating remote and hybrid work into firms prior to the epidemic. "We no longer need to make it public. Organizations are now formally establishing their remote or hybrid positions, as everyone is aware of."

According to Sutton, co-working spaces have historically been favored by independent contractors and those who work from home but lack a functional home office. Even if those groups continue, she notes that coworking spaces are also seeing an increase in demand from firms that, as a result of the remote work revolution, are cutting down on or doing away with their permanent real estate footprints.

According to her, coworking spaces provide flexibility as well as a fantastic chance for community building and social connection. These will be crucial in offsetting some of the drawbacks of remote work that people are starting to realize, including loneliness. Sensing or desiring social connection. "Flexible workspace is becoming more and more important to remote organizations as a strategic tool. They can offer subsidies or even put teams in the same area as local headquarters, using coworking spaces."

WeWork's business model failed, not the epidemic, according to John Arenas

Additionally, more and more employees are integrating co-working spaces into their new remote work lifestyles. According to Mark Dixon, the founder and CEO of IWG, the parent business of Regus, a worldwide network of co-working spaces, an increasing number of clients now see access to these spaces as similar to having a gym membership: Benefits, facilities, social gatherings, etc Searching for characteristics Still, only a tiny percentage of members use the area at any given moment.

Furthermore, Dixon notes that a growing number of the company's one million clients—many of whom work primarily from home—are utilizing its virtual offices in place of physical ones, where "we provide all of their Administer, answer their calls, deal with all their admin." These workers also have the freedom to visit any building they want. "This shift to a more mobile workplace is directly responsible for its notable growth over the past few years."

In general, these arrangements are become more and more appealing and are crucial to the post-pandemic hybrid work environment as they provide workers with the finest aspects of the workplace at their convenience. Dixon is quite hopeful about the industry's future and thinks they truly desire that. WeWork is continuing with its bankruptcy petition, while IWG is claiming record profits.

Filling vacancies at WeWork

WeWork's demise may provide chances for other co-working space providers as the demand for co-working increases, particularly if employee tastes shift.

Many firms have established themselves in the co-working area throughout the years, but with less headlines, debates, and mini-series. WeWork, on the other hand, is perhaps the most well-known brand in the industry.

Regus is one of these businesses with a steady presence in the market, having been founded 35 years ago. "They're coming from a different direction, but we're in the same industry and segment," Dixon adds, noting that IWG employs more than 4,000 people across 120 countries. "[WeWork] is very concentrated in a few cities, so a distinction is that we've got a big dispersed network across numerous cities in the US and globally."

Dixon thinks that, in large part because urban professionals are searching for coffee-shop alternatives, workers are no longer shopping for offices in the midst of cities as they did when WeWork first launched in 2010. was directed at. Rather, they have observed that modern distant workers are gravitating into hyperlocal locales as a result of their preference for inner-city commutes. Using a similar strategy, Serendipity Labs establishes locations in nearby suburbs of major New York cities.

In the end, Sutton claims that ever since he founded FlexJobs in 2007, observers have suggested that the period of flexibility is coming to an end by citing recent occurrences. "IBM rescinding its policy on remote work at one time, and Yahoo! and Marissa Mayer at another. Individuals are always seeking an excuse to claim that something won't occur."

WeWork is going insane due to its recent difficulties. "I don't believe there has been a sudden decline in interest in co-working spaces because of WeWork; the numbers show an increase in interest."