IWG warns of higher Covid costs, as offices giant predicts hybrid working here to stay
Serviced office giant IWG has said it will benefit from hybrid working becoming the “new norm”, but it expects Covid-19 costs to be £160 million higher than planned.
That cost is on top of £155.8 million the group had set aside for the pandemic last year, and is largely related to closures of unprofitable sites or those where it can’t negotiate more favourable rents.
In the UK numerous office workers have done their jobs remotely since March, when the first lockdown started.
While some people returned back to headquarters during the year, the government guidance is currently to work from home. It is expected a number of firms will look to embrace a mix of home and office working post-pandemic.
FTSE 250 firm IWG, behind the Regus and Spaces brands, said: “In response to the prolonged pandemic and to ensure we emerge a stronger business post Covid-19, we have identified, and are implementing, further prudent actions to reduce costs, including additional network rationalisation, similar in magnitude to the previously announced rationalisation programme, and giving more support to our customers.”
Last year it said it would close around 4% of its network, which today comprises around 3300 centres.
Group revenue for 2020 is anticipated to be around £2.45 billion, compared to £2.6 billion a year earlier.
The company, led by Mark Dixon, said: “Whilst 2020 was the most challenging year ever experienced by the group, and these conditions are likely to persist well into 2021 before we see the environment improving, it has accelerated the shift to a new way of working significantly and we have continued to invest for the future, developing new products and services.”
The firm added: “Hybrid working has become the new norm and, in our view, is here to stay. IWG is the leading enabler and beneficiary of this trend. We are seeing more enterprises wanting to partner with IWG to benefit from this new way of working.”
It said, whilst current market conditions remain very challenging, the “future of flexible and hybrid working looks very positive”.
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