Amid pandemic, WeWork Korea tops in revenue growth

Driven by corporate demand for alternative offices amid the pandemic, WeWork Korea’s revenue last year jumped 20 percent, the highest of all branches of the US co-working space firm worldwide, its new chief said.

Without providing exact numbers, Patricia Chun, WeWork Korea’s general manager, said the Korean office is the only WeWork branch in the world to see 20 percent revenue growth during the peak of the pandemic last year, while the New York and London locations hemorrhaged money due to extensive lockdowns and social distancing measures. The New York-headquartered firm reportedly lost $3.2 billion globally in 2020, following a loss of $3.5 billion in 2019.

“We see improvement in vacancy rate. The occupancy rate looks to be not too different from before the pandemic,” she said during an interview at the Korean headquarters in Euljiro, central Seoul, Tuesday.

The surprising growth in the Korean market was attributable to the company’s efforts to offer safe co-working spaces without compromising the quality of service, she said.

WeWork Korea, for instance, ran a program that gives extra access to corporate members so that those companies can flexibly manage the number of employees working at WeWork spaces at no extra cost.

In addition, it has been keeping strict and frequent cleaning and disinfecting routines in place to provide the best work environment for its members.

“WeWork is the only co-working company that offers work spaces for Fortune-listed companies, like Google, Amazon and Samsung, as well as small startups and individual entrepreneurs in Korea, so it is very crucial to offer the same quality and safe services across its different locations,” she said.

This year, WeWork will put priority into transforming itself into a profitable company before the firm’s planned initial public offering after the botched listing scheme in 2019. The company recently announced it would merge with special acquisition company BowX Acquisition to be listed on the US stock market.

Investment firm SoftBank and former WeWork co-founder and CEO Adam Neumann are also expected to reach a settlement in which the former acquires 25 percent of the former CEO’s shares for nearly $500 million to end a legal fight between the two that unfolded after the failed IPO.

Although the company will try to improve profits, she said that the Korean branch will not achieve the goal by reducing the number of its existing locations in the domestic market to cut costs or by opening a new location this year.

“Under the first generation of WeWork executives, the company put focus only on expansion, which I don’t think was a totally wrong scheme for an IT company. Under the new leadership, which I call WeWork 2.0, however, the company will be laser-focused on improving profitability,” she said.

WeWork’s initiative to put profit first came after the company suffered a series of harsh blows over the past couple of years, including layoffs of employees and withdrawals of some offices worldwide. The Korean branch was also rumored to be shutting some of its offices in Korea last year.

As part of efforts to cater to different needs of customers during the lingering coronavirus crisis, WeWork Korea is planning to launch new services later this year, including an All Access pass and an On Demand pass, both of which have been available in some US locations.

With the All Access pass, customers can choose to work at any WeWork location across 150 locations worldwide, while the On Demand pass allows users to book desks or office spaces on an hourly basis. Due to current travel restrictions, it may be hard to utilize global spaces for now, but Korean customers will be able to work at domestic locations freely with the All Access service, Chun explained.

The company will also try to come up with services customized specifically for Korean customers while organizing networking events that actually help professionals in related industry sectors to meet and partner up for joint projects, different from the alcohol-focused parties that were a trademark under the company’s previous leadership.

WeWork currently runs 20 offices in Korea -- 18 in Seoul and 2 in Busan. Chun, an MBA graduate of the Wharton School at the University of Pennsylvania, previously worked in mergers and acquisitions at Nomura International and Lehman Brothers. She also served as chief strategy officer for mobile delivery giant Delivery Hero’s Korean office, building business strategy and managing government relations.

By Kim Young-won (wone0102@heraldcorp.com)