Office space provider IWG posts £620m loss but expects Covid-19 rebound | Regus
IWG, the world’s biggest flexible workspace provider, has reported an annual loss of more than £620m but expects a big jump in demand once the Covid-19 pandemic subsides as hybrid working – from home and offices – becomes the norm.
Mark Dixon, the IWG chief executive, said: “We anticipate a massive surge in growth when we eventually emerge from the unprecedented downturn that the Covid-19 pandemic has created.”
The company reported a pretax loss of £620.1m for 2020, compared with a profit of £118.5m the previous year. Revenues fell 5.3% to £2.5bn, and IWG incurred a charge of £379.5m resulting from pandemic-related costs.
But Dixon said the firm had signed up half a million workers in the past month and had about a million more in the pipeline.
The UK-listed company, formerly known as Regus, has just struck its biggest deal to date, with the Japanese telecoms group NTT, for 300,000 workers around the world who now have access to its network of offices. It also agreed a deal with the bank Standard Chartered for 5,000 workers.
“Something’s changing in the way people work,” Dixon told BBC Radio 4’s Today programme. “Working from home, or hybrid working which is working some of the time from home, some of the time from an office close by to your home and some of the time coming into a corporate headquarters, will become the norm for many people working for many companies.”
He said using less space and reduced commuting would be better for the environment and “that will come very high up on corporates’ agenda worldwide once Covid moves aside”.
IWG has 3,300 offices around the world, two-thirds of which are in suburbs and smaller towns, and one-third in bigger cities.
Rival WeWork plans to launch an “all access” monthly membership that will allow businesses to work from any of its offices.
The pandemic has dramatically accelerated the shift to a new way of working that was already under way. “Increasingly, the workplace is anywhere workers and businesses want it to be: at home, in a local office, or at a corporate HQ,” IWG said.
On Monday, BP told 25,000 office-based staff that they will be expected to work from home for two days a week as part of a post-pandemic shift to flexible working patterns. Several banks have also announced changes, with Lloyds Banking Group planning to reduce its office space by 20% over the next two years.
IWG predicts that by 2022, close to 1.9 billion people will be working flexibly worldwide, and by 2030, 30% of global office space will be flexible, from just 2% today.
A report from EY published in August said: “Remote work is here to stay.” It found that almost two-thirds of employees who did not work remotely before the Covid crisis wanted to work remotely for at least one day a week, but also that 36% of those who worked remotely full-time before the pandemic wanted a mixed of working from home and in the office.