But when that market tightens up, and we see less new startups coming out and with less money than before, those startups will take a hard sobering look at their finances and decide they simply can’t afford to blow money on shitty overpriced hipster co-working spaces, which unfortunately for WeWork is the only product they offer. WeWork will run into cashflow problems and that will be the end of it.
Also, it isn't just tiny startups that are using We Work. The article stated that 40% of their revenue comes from large enterprises. The money will be much slower to dry up for the large, established companies.
-- Home offices for employees that can have one.
-- Move remote employees into corporate HQ or other existing offices, lay-off employees who refuse.
In a recession? Probably remote work. A small startup that's running into cashflow problems, and who has no dedicated office space -- coworking spaces seem like the first overhead expenditures to get cut.
Individual contractors and small teams (<10) will likely go back to working from home or out of cafes.
Larger, enterprise teams will have more, and better, options and may cut expenses by downgrading to cheaper accommodations either via less "hip" direct competitors (Regus) or taking on cheap/discounted leases directly.