WeWork forced to file for bankruptcy in the US
WeWork has confirmed that will file for bankruptcy, but will not be deterred by the major financial challenges and remains committed to a future of flexible office spaces.
The company said on Nov. 6 that it would begin “a comprehensive reorganization to strengthen its capital structure and financial performance and best position the company for future success.”
WeWork’s financial problems have been public knowledge for several years and are partly the result of decisions made by ex-CEO Adam Neumann.
WeWork files for bankruptcy and remains operational
The SoftBank Group-backed flexible office space provider was once valued at $47 billion, but its attempt to go public failed dramatically and the company’s valuation plummeted.
Reuters reported that WeWork had net long-term debt of $2.9 billion as of June 2023, and more than $13 billion in long-term leases.
In its latest announcement, the company said: “WeWork will further rationalize its commercial office leasing portfolio while focusing on business continuity and delivering best-in-class services to its members, as global operations are expected to continue as usual.”
The company, which has filed for protection under Chapter 11 of the US Bankruptcy Code, added: “WeWork’s locations outside the US and Canada are not part of this process. WeWork franchisees around the world are similarly unaffected by this proceeding.”
Referring to previous bad decisions, current CEO David Tolley said: “Now is the time for us to move forward by aggressively addressing our legacy leases and dramatically improving our balance sheet.”
In the meantime, its office spaces remain open and operational and customers remain largely unaffected, although it is unclear what the future holds for WeWork and how its office space portfolio may change.