WeWork India, the local arm of the New York-based workspace-sharing company WeWork, on August 9 said there is no impact on its business in the country after its parent entity flagged bankruptcy risks.
"Any development that is emerging globally has no impact on the business here," WeWork India told CNBC TV-18, adding that the fundamentals of its India business "continue to remain strong".
WeWork India is backed by the Embassy Group, which holds a majority stake of around 71 percent in the firm.
The company, in its clarification to CNBC TV-18, pointed out that it emerged profitable last year despite the COVID-19 pandemic-related challenges. "We ended FY23 with a revenue of Rs 1,400 crore and Rs 250 crore in earnings," it noted.
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While WeWork India sounded optimistic about its business outlook, the company's parent entity on August 8 said there is “substantial doubt” about its ability to stay in business over the next year because of its financial losses and its need for cash, among other factors.
WeWork went public in October 2021 after a spectacular collapse during its first attempt to do so two years earlier — which led to the ousting of its CEO and founder, Adam Neumann. The company was valued at $47 billion at one point, before investors started to drop off due to Neumann's erratic behaviour and exorbitant spending.
The company leases buildings and divides them into office spaces to sublet to its members, which include small businesses, startups and freelancers who want to avoid paying for permanent office space.
But over time its operating expenses soared and it relied on repeated cash infusions from private investors. The company also said on Tuesday it is facing high member turnover rates. It said it plans to negotiate more favourable lease terms, control spending and seek additional capital by issuing debt, stock or selling assets.
WeWork's interim CEO, David Tolley, sounded an optimistic note Tuesday in the company's results for the second quarter, during which it lost $349 million.
"The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimization efforts, and maintaining a disciplined approach to reducing operating costs," Tolley said.
With AP inputs
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