31 Mar 2020
Posted in Coronavirus
Coronavirus puts office sharing in trouble as home working is here to stay
Following the news that WeWork is struggling to secure a vital cash injection hit by falling demand from tenants amid the coronavirus (COVID-19) crisis;
Laura Petrone, Senior Analyst at GlobalData, a leading data and analytics company, offers her view on the impact of COVID-19 on the shared workspace industry:
“In the short term, there will be a negative impact on office-share providers such as WeWork – although this company was already in financial trouble before the crisis. The flexible workspace sector will be badly hit due to falling demand from tenants, and leasing models that are based on long-term costs and short-term, easily cancelled customer contracts.
“Given WeWork’s increasingly precarious position, it is not going to be a leading contender for additional funding. WeWork recently disclosed that a further $1.1bn of new funding it had expected from SoftBank had been put in doubt.
“In the long term, the impact does not look promising either. Coronavirus is a huge catalyst for the future of work, and workplaces and workforces will not be the same after the crisis. As quarantines are enforced around the world, together with school and business closures, we are reaching a tipping point in in the way people work. Employers and employees are realizing that working from home is not that bad – with benefits in terms of costs saving, work-life balance and carbon footprint reduction.
“Should working from home become a consolidated trend, the sharing workspace model will run out of steam. Even smaller customers may turn their backs on WeWork. In times of sluggish growth, saving costs for the self-employed will be especially important and renting a work space might not look particularly attractive. In addition 2020 will be a very tough year for start-ups as many will struggle get the funding they require to survive. ”