With the ongoing Coronavirus pandemic resulting in over 875,000 cases as of this writing, and deaths of over 43,000, companies have made it clear that employees are personae non gratae at the workplace. Working from home (WFH) is all the buzz right now, as the world undergoes its largest remote working experiment ever. With nearly everyone practicing social distancing, what happens to coworking now?
‘We’re moving out. You can sue us. We’re not paying.’
Around the world, coworking spaces are reporting declining demand, no-show tenants, and SMEs completely jumping ship. This has left an international billion-dollar industry at a loss of what to do.
“It’s just Armageddon,” Scott Harmon, co-founder and CEO of Swivel, a company that sells software for leasing office space with flexible terms, told news site Protocol. “There’s no two ways around it.”
According to Harmon, many of their clients have simply bailed out on them, with quite a few hvign moved out and broken their leases.
“They said, ‘We’re moving out. You can sue us. We’re not paying.'”
Such is the situation for businesses offering coworking spaces.
WeWork, the most notorious of these companies, hasn’t been spared the mass-migration either. While the company assures investors it has enough cash to weather the crisis, Bloomberg reports it has already laid off 250 of its staff as a result of the pandemic, after letting go of 2,400 employees in November following 2019’s IPO debacle.
Big or small, the mass-migration has affected all coworking companies.
According to Sifted, “a survey of over 14,000 coworking spaces in 172 countries worldwide by Coworker, a coworking marketplace website, found that 72% of spaces said they have witnessed a significant drop in the number of people working from their space since the outbreak.”
The site continued: “At the same time, 41% of coworking spaces reported a negative impact on membership and contract renewals since the outbreak. And 67% of spaces have experienced a drop in the number of new membership enquiries.”
While coworking businesses have suffered, productivity apps like Slack, Mcirosoft Teams and Zoom are seeing a resurgence, indicating a surprising shift in the future of work, one no would could have probably foreseen. At a time when coworking spaces were expected to grow at an annual rate of 13% internationally up until 2022, intelligence firms will have to go back to the drawing board to reconsider their forecasts. It’s not often that you get an economy rending catastrophe on the global scale akin to the Coronavirus.
So what can coworking firms do now?
As the demand for coworking spaces continues to plummet, companies like WeWork have been trying to attract customers by offering them half-off deals for longer-term leases, in an attempt to minimize cancellations and buff demand. This is according to people with knowledge of the matter, who were in touch with Bloomberg.
Others have been crossing into rival territory, arranging virtual meeting rooms for their clients to attend, and pushing other rendezvous to the digital space.
For others, it’s business as usual. Many of these companies have left their doors open, while ensuring that they have upped hygience standards across their facilities.
As for the future of coworking, no one has been able to settle on one prediction.
“Revenues will go down, no doubt about that, in the coming weeks,” Jean-Yves Huwart, the founder of the Coworking Europe conference, told Work Design Magazine. “The key question now is: how long will the pandemic last and how hard is it going to hurt the economy? Some expect five weeks of confinement, then some months of slow recovery. Others bet on a ‘V’ shape kind of crisis, with a rapid economic reboot. The truth is that nobody knows.”