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Rakuten will not renew its contract with WeWork

Japanese e-commerce giant Rakuten has decided to not renew its contract with WeWork when it expires next month, consistent with a report within the Japan Times. Rakuten had leased about 700 desks in Tokyo, but is now getting to move employees from its fintech division into its own new offices.

Tokyo is additionally the headquarters of WeWork’s biggest investor SoftBank, which took ownership of the coworking startup last October as a part of a bailout deal after concerns about WeWork’s financial stability and therefore the behavior of co-founder and former chief military officer Adam Neumann led to the postponement of its IPO.

Due partially to its close relationship with SoftBank, WeWork features a high number of clients in Japan, but the Japan Times reports that the COVID-19 pandemic caused occupancy to drop in about 60%.

Despite its troubles, SoftBank Group chief operating officer Marcelo Claure, who took over as WeWork’s chairman after Neumann’s resignation, told the Financial Times earlier this month that the corporate is on track to succeed in operating profitability by the top of next year, thanks partially to aggressive cost-cutting measures.

He also said that albeit revenues were flat during the second quarter because many tenants terminated their leases or stopped paying rent, some companies have leased WeWork spaces to function satellite offices on the brink of where their employees live as they still work from home.

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