Landlords in London are reportedly refusing to sign new leases with WeWork. A smart move perhaps, considering the company has recently said it’s too skint to pay staff the severance they are owed. Meanwhile, Hong Kong co-working company Campfire has collapsed its UK arm. At around 3pm on Friday 13 September, the three staff and 150 tenants at its Shoreditch site were told to clear their desks in a letter delivered by bailiffs. The abrupt closure was blamed on Brexit ─ although a source close to the matter described this to many as ‘bullshit’.
Despite the disruption and unwanted attention, both company’s founders don’t seem to be doing too badly. WeWork’s Adam Neumann looks set to walk away with an extra $1.7bn in his pocket, while days before Campfire’s UK closure, news of co-founder Wang Tse’s purchase of a $22m shopping centre emerged.
Optics aside, the struggles of these two companies illustrate just how difficult it is for co-working companies to survive in this competitive market. On the flip side, operators that provide value beyond simply selling hot desks and wifi don’t seem to be experiencing the same problems. Huckletree, a co-working company that tailors each of its spaces to support different sectors, has recently announced new spaces in Dublin, Manchester and Oslo. This summer, Alma, a co-working company which provides spaces where mental health practitioners can host patients, raised $8m.
Has the toppling on WeWork the industries biggest co-working provider created a domino effect for the rest of the industry? We shall wait to see.