The coworking space industry is reeling from a staggering 60% loss in business, with providers, professionals, and analysts urgently calling for political and economic stability, as well as the resolution of internet disruptions that have crippled operations. The dire situation, particularly in Karachi—Pakistan’s economic hub—has led tech companies to relocate, with new investors steering clear of the market.
Industry insiders report that coworking spaces have been battling mounting challenges over the past year, with conditions worsening in recent weeks. These spaces, which play a crucial role in supporting freelancers, remote workers, and micro-agencies in sectors like e-commerce, social media marketing, and business process outsourcing, are now teetering on the edge of collapse. The rising demand for coworking spaces in major cities had initially attracted investors to develop this vital infrastructure, aimed at boosting business productivity for entrepreneurs.
Coworking spaces offer affordable office solutions, helping businesses navigate challenges like prolonged power outages and sluggish internet speeds while providing other essential amenities. However, the ongoing issues with internet disruptions, exacerbated by delays in firewall system installations, have severely impacted their operations. Industry players are urging those responsible for these installations to expedite their work or deploy alternative IT experts to resolve the crisis immediately.
Recognizing the growing productivity of freelancers and entrepreneurs, the previous caretaker government had planned to establish coworking spaces in various cities across Pakistan. Unfortunately, recent internet disruptions have severely undermined these efforts, leading to significant losses for investors and jeopardizing the future of the coworking industry.
Muhammad Yasir, an IT and Telecom Sector Analyst, emphasized the critical importance of coworking spaces, stating, “These co-workspaces can serve as the ideal workstations, offering fast internet under vigilant supervision, especially with the necessary firewalls in place. In today’s digital age, the internet is as essential as Roti and Kapra (bread and cloth). From communication to education, and entertainment to business, every sector depends on stable internet connectivity.”
Yasir further highlighted the impact of internet issues on businesses, categorizing them into two groups: those that operate effectively with internet support and those entirely dependent on it. The ongoing disruptions have hindered the former and severely crippled the latter.
Abid Beli, CEO of WorkMore, pointed out that local IT companies have been struggling with uncertainty, political and economic instability, and declining business performance for over a year. International companies have also been affected by internet disruptions due to firewall installations and other issues. The once-thriving coworking space industry is now in decline, with 62 out of over 200 coworking spaces in Karachi experiencing a 60% drop in business.
“We offer a range of coworking solutions, from small rooms to large halls, including dedicated desks, hot/flexible desks, and private rooms for teams of two to 40 or more people. We provide furniture, internet, electricity backup, refreshments, and more,” Beli explained.
Ehsan Elahi, CEO of BuildIT, added that frequent internet disruptions are causing significant distress for coworking space providers and their clients. This industry, which has been growing for over a decade, is now witnessing approximately 30% of international companies planning to relocate their operations due to ongoing losses.
Hasan Shahid, a Lahore-based entrepreneur who runs a coworking space, noted that many small companies and startups from abroad have been utilizing coworking spaces in Pakistan. However, with the current instability, new foreign software companies are reluctant to invest, and local IT companies are also considering moving their businesses out of the country.
