We Work is Shutting Down a Restaurant Co-Working Startup it Acquired Only 4 Months Ago

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Another day, another WeWork related casualty. This time: Spacious, a restaurant-based coworking startup that WeWork recently acquired, announced it’s shutting down. Spacious

The famously struggling co-working giant bought Spacious in August, and now it’s closing its doors.

We Work is closing its restaurant co-working startup Spacious, after acquiring the company only around four months prior. It’s the latest sign that the troubled company is cutting costs by offloading the plethora of business it rapidly acquired in the past few years.

Making matters more complicated, in October a whistleblower filed a complaint about WeWork’s original Spacious’s original acquisition with the US Securities and Exchange Commission (SEC), alleging that executives pushed the deal through without doing enough outside review of Spacious’s financials (a claim that WeWork has denied). According to the complaint, WeWork bought the company for $42.5 million.

Spacious is just one of several startups We Work has acquired in the past few years that are being shut down, going through layoffs, or on the market. Executives at Conductor, an SEO and content marketing startup that We Work acquired, are buying back the company from their troubled owner. And Managed by Q, which sells technology to help companies manage workplace tasks and services, is reportedly up for sale. Meetup, the popular social network for people to get together over shared interests, is going through restructuring and layoffs and is also reportedly up for sale.

“As part of WeWork’s renewed focus on its core workspace business, Spacious will close its doors on December 31, 2019. We regret any disruption that this may cause to you or your business,” reads an email sent to Spacious customers on Thursday.

According to Business Insider, which first reported the shutdown, Spacious’s entire staff of 50 employees was laid off.

A spokesperson for WeWork shared a statement confirming the shutdown along with the following:

“To minimize any disruption, Spacious members will receive prorated refunds as well as discounts on select WeWork memberships in order to maintain access to flexible workspaces and a global community. The Spacious team will receive severance and other forms of assistance to aid in their career transitions.”

Spacious, founded in 2016 by Chris Smothers and Preston Pesek, built its business renting out tables at vacant restaurant space in the day time to people looking for coworking space.

In July, the startup shut down its San Francisco business locations. At the time, the company said it was in part due to regulatory hurdles. Around a month later, We Work acquired the company.

For Spacious customers, those with recurring subscriptions and recently purchased day passes will get discounts on renting desks at WeWork in the future if they choose.

Add Spacious to the growing list of collateral in WeWork’s cinematic implosion.

Correction: A previous version of this article misstated the details surrounding a whistle blower’s complaint with the SEC over We Work’s Spacious acquisition.

Reference Link:
https://www.vox.com/recode/2019/12/12/21012723/wework-spacious-shutting-down-adam-neumann-coworking