WeWork China has set ambitious revenue goals that it wants to achieve by 2020, as it tries to overcome repercussions of its parent company’s failed initial public offering (IPO) and ouster of former CEO Adam Neumann, according to a report by Reuters.
The company is also struggling with employee cutbacks and low occupancy rates at its properties. The new targets were announced by WeWork China General Manager Alan Ai during an internal meeting in Shanghai, sources told the news outlet.
During the meeting, which was held on Wednesday (Dec. 4), Ai said the company wants to bring in non-core revenue of about $30 million by 2020 and for that revenue to make up more than 6 percent of total money in the country that it takes in. He did not specify exactly where that non-core revenue would come from.
This move illustrates that WeWork China is looking for new ways to make money, and it would be a large increase in revenue for the company, which mostly generates revenue with tech services and other products to help its tenants.
WeWork is currently trying to refocus after its recent struggles, and it staved off bankruptcy with a $9.5 million emergency cash injection from SoftBank Group, which is its biggest investor.
WeWork actually owns 59 percent of WeWork China, along with other investors that include Softbank, Hony Capital and Trustbridge.
China has not been a bright spot for the company, as WeWork China struggles with less than impressive occupancy rates and a high level of competition in the country. WeWork China brought in $99.5 million in revenue last year.
WeWork China rents out offices in 120 buildings in 10 cities throughout China, in places like Hong Kong, Shanghai and Beijing. It also has offices in smaller cities like Shenzhen, Guangzhou and Wuhan.
Smaller markets have an occupancy rate of 43 percent, and some as low as 25 percent. Larger markets have an occupancy rate of around 60 percent.