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WeWork to close some global offices amid financial turmoil

By Nithya Bose in US business news, posted November 2, 2023

WeWork, the troubled office-sharing company, will close some global office spaces.

Once valued at $47 billion (£38.6 billion), its shares have plummeted amid speculation of potential bankruptcy filing as early as next week.

While the number of UK sites facing closure remains undisclosed, WeWork confirmed the shutdown of one central London location near Blackfriars station.

This move aligns with the company's strategy to enhance liquidity and fortify its balance sheet.

The company notified members in London's Southbank about the closure of "unprofitable" sites.

WeWork requested them to vacate the premises by November 30, assuring them of "alternative workplace solutions."

The firm is grappling with financial difficulties, having recently informed the US financial regulator about temporarily postponing payments on certain debts in agreement with creditors.

WeWork is now poised to renegotiate leases, not just in the UK but globally.

It’s in response to challenges stemming from rapid expansion, rising interest rates, a failed attempt to go public, and the departure of its co-founder.

While WeWork has emphasized its commitment to the UK and Ireland, it has declined to comment on reports of potential Chapter 11 bankruptcy proceedings in the US.

As of June's end, WeWork maintained over 700 locations across 39 countries.

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WeWork's woes began with the collapse of its initial attempt to go public in 2019, driven by concerns surrounding its debts, losses, and management.

Shortly before scrapping the share sale, founder Adam Neumann stepped down as CEO due to mounting scrutiny of his leadership.

Following this setback, the COVID-19 pandemic exacerbated the situation as remote work gained traction, leading to public criticism from tenants seeking lease cancellations.

However, WeWork pressed on, divesting some businesses, reducing its workforce, and modifying or canceling numerous leases.

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In 2021, WeWork finally debuted on the New York Stock Exchange with a significantly lower valuation than initially envisioned.

The Japanese conglomerate SoftBank poured billions into WeWork.

But the company's share price fell by nearly 99 percent in the past year.

By August, WeWork raised "substantial doubt" about its ability to sustain operations.

It cites softer demand and a challenging operating environment as major challenges.

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