Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
WeWork faces growing criticism for poor service
People sit at desks in a WeWork co-working space on Yeouido in Seoul. / Courtesy of WeWork Korea
By Baek Byung-yeul
By Baek Byung-yeul
Many startups and small business operators have chosen WeWork for their office space because they can poistion their employees in highly competitive locations in Seoul with lower monthly rent, luxurious amenities and benefits from various programs such as networking and educational events.
However, those very companies are now turning their eyes to other options due to decreased benefits. An official from a foreign-based shared office operator said it has attracted an increasing number of companies recently as more companies are complaining about the poor quality of WeWork.
“Since the news that a startup CEO was asked to pay an absurdly expensive amount of maintenance fees, many companies have asked us to find them working spaces. Most of them said they decided to relocate their work spaces to other shared offices due to the small office space of WeWork,” the official said.
A CEO of a local startup moved office from WeWork recently to another shared office citing no good reason to stay with WeWork.
“WeWork is increasingly renting its office spaces to non-member companies, which makes it harder for member companies to do business,” the CEO said. Also WeWork is trying to attract companies that have more than 100 employees, which also makes us lose opportunites to build networking relationships.”
Another CEO of a local startup also criticized WeWork recently for demanding ridiculously high maintenance fees when leaving the shared office.
“We used WeWork's shared space for two years and decided to relocate to another office. While preparing for moving, we were asked to pay 2.52 million won ($2,166) to repaint the wall of the building simply because we left some tape marks. We made a complaint to WeWork but the answer is that it is just policy,” the CEO wrote on social media.
A startup CEO said he decided to set up his business at a shared office co-operated by the Seoul city government and state-run corporations as they were able to use the shared office space at a lower price.
“Before we decided to set up our business we were considering using renowned shared offices such as WeWork but chose to set up at a shared office provided by the city government and state-run companies because it is cheaper. Also, our office is located in Yeoksam-dong, southern Seoul, so I am able to locate employees in the prosperous Gangnam area,” he said.
WeWork has been striving to find a breakthrough in its faltering shared office business. The company was valued at $47 billion last January but its valuation fell to $8 billion in the face of a cash crunch. The company cancelled its planned initial public offering and co-founder Adam Neumann also resigned as CEO.
To stabilize its business, WeWork also conducted massive layoffs recently, cutting about 2,400 employees globally.
In response to the complaints from its member companies, an official from WeWork Korea said, “we will continue to remain focused on our core mission and put our members first."