Home » US business news » WeWork announces bankruptcy as it battles $2.9 billion debt

WeWork announces bankruptcy as it battles $2.9 billion debt

By Hugh Fort in US business news, posted November 7, 2023

Struggling office provider WeWork has filed for bankruptcy.

The company, which was once valued at $47 billion, has seen its share price drop by 98 percent, meaning its value is now under $50 million.

A company statement said: “WeWork spaces remain open and operational and we will continue to provide our members with the exceptional experience they have come to expect.”

Trading of Trading of WeWork shares was halted on Monday as the market anticipated the bankruptcy filing, which had been speculated about in prior reports.

The company's restructuring plan includes an agreement with its creditors to substantially cut down its funded debt and potentially terminate certain leases, particularly those of non-operational sites.

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David Tolley, CEO of WeWork, said: "Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet.

"I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement.

"We remain committed to investing in our products, services, and world-class team of employees to support our community."

Established in 2010, WeWork's model involves securing long-term leases on properties and offering short-term co-working office memberships.

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Despite an initial $12.8 billion investment, primarily from SoftBank, post-prospectus evaluations estimated WeWork's value at $10 billion.

The Covid-19 pandemic forced WeWork to close numerous locations due to lockdowns and the surge in remote work.

WeWork still has 777 sites in 39 countries

Nonetheless, the company maintains a substantial commercial real estate footprint, with around 777 sites in 39 countries, featuring 906,000 desks as of June.

In response to the changing landscape post-pandemic, WeWork has been repositioning itself as a provider of flexible office spaces.

Despite these efforts, the company reported a loss of $696 million in the first half of the current year.

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