Coronavirus Vs. Coworking Spaces
The coronavirus having an effect on economies and businesses all over the world. What’s worrying is that things are just getting started. We have not seen the worst of it. Almost all industries will be impacted negatively by the pandemic, some more than others.
It seems that the coworking space industry is going to be one of the worst hits sectors of the economy. Together with those in the travel industry.
The WeWork Problem
Word spread in one of WeWork’s shared office space in London that one of the employees there was infected by the dreaded coronavirus. That was not the first location that was struck by the virus. Several other locations of the company have also been affected.
The WeWork location in London announced that it would be closed down for disinfection. That’s what it did with the other locations. It sent crews to clean down the whole office. The intention was to ensure that the working space can continue functioning.
Unfortunately, one of the contractors who have worked in the building was later diagnosed to be infected as well. The site reopened later on but the incident and the similar ones that happened before it highlight the vulnerability of the coworking space industry.
Coworking in the Age of Social Distancing
Within a very short period, working from home has become the standard for many businesses. In many countries, social distancing is now becoming the norm. With those trends taking over society, the idea of coworking spaces and shared office spaces have suddenly become obsolete.
The situation for WeWork is further complicated by the fact that it had some serious problems last year as it was involved in scandals, mostly caused by its founder Adam Neumann.
While it was experiencing its problems from last year, most analysts believed that the business itself wasn’t finished. The company might not be able to reach its projected value before its IPO but by shaping things up, it can become viable again.
Now, this new problem might be the death-knell of the company. This is where the business model of coworking spaces might work against them. When you offer startups to scale down as they need it, they will surely take advantage of that during a pandemic when people cannot work in an enclosed space.
If SoftBank makes good of its threat to back out from the planned bailout of WeWork, then the industry leader might be done for.
A Threat to the Industry
It’s not just WeWork that is affected by the pandemic. The coworking industry as a whole is under threat because of the virus. Its main enemy is its business model. It offers shared spaces for people to work in. With people being told to stay away from each other, coworking spaces are bound to take a hit.
People will be staying away from coworking spaces for a while until the virus stops spreading. The problem is that it’s not clear when that will happen. If it lasts for several months, then other coworking space companies will go the way of WeWork.