Fundamental Shift In Geography Of Work
Mark Dixon’s IWG has succeeded where other space providers like WeWork have stumbled. The company is now changing the face of remote working as it pushes into suburban and rural locations, writes
The implosion of co-working space provider WeWork suggested that the business model was flawed. Turns out that just the wrong guy was in charge. Founder Adam Neumann wasn’t a good businessman and Masayoshi Son, whose SoftBank was into WeWork for c.$16bn, had more money than sense.
WeWork entered bankruptcy last November while International Workplace Group (IWG) was expanding faster than ever. Formerly know as Regus and led by founder Mark Dixon, IWG is the world’s largest hybrid workspace company, with a network of 3,510 centres in 120 countries. Like WeWork, IWG owns many of its properties, but increasingly it is partnering with owners of office buildings who, in the absence long-term corporate tenants, reach a lease deal with IWG.
Last year IWG opened 328 new centres and shuttered 159. In Ireland the company is opening four new locations this year, in Limerick, Blanchardstown, Blackrock, Co. Dublin, as well as in Clonmel, where the Regus at The Ormond Centre will have 160 workstations across 10,500 sq. ft workspace.
IWG also went rural last year with a Regus centre at West Cork Business & Technology Park in Clonakilty, in partnership with dairy co-ops Drinagh and Lisavaird. The Clonmel and Clonakilty centres tie in with Dixon’s belief that his company should put down some roots close to where employees live rather than where their employers are based.
Dixon’s view is that the shift towards the hybrid model is “one of the megatrends
of our time”. In IWG’s annual report, Dixon told shareholders that where and how people work is actually far more nuanced than much of the current conversation implies.
According to Dixon: “It’s not just a binary choice between working from a traditional city centre and from home. There’s a third option: working out of a local co-working space or office, near to home, with other like-minded people. In fact, most white-collar employees are working from a combination of all three of these locations.
“We are seeing a fundamental shift in the geography of work, with the centre of gravity moving towards local communities. That’s why, during the course of 2023, around 80% of the new locations we signed were in the suburbs and smaller towns where people actually live. That is not to say that businesses are abandoning city centres — far from it. Increasingly, we are helping companies shake off the expense of the long-term city-centre lease and replace it with a flexible, costeffective agreement on a smaller space in one of our city-based centres.”
In another sign of the times, IWG has decided that desktop phone systems are no longer a prerequisite in many of its centres, which also operate under the Spaces, HQ and Signature brands. The company booked a £34m write-off charge in its 2023 accounts relating to obsolete desktop phones.