A WeWork, a shared office company once valued at US$47 billion was forced to declare bankruptcy in the US. The decision follows the rise, and fall, of a company that was once seen as the future of the workplace.
WeWork’s filing will give you protection from your creditors and landlords as you restructure your debts.
Based on the latest share price, the company is now worth less than $50 million. The bankruptcy will affect WeWork’s business in the US and Canada.
The company said its co-working spaces remained open, including in the United Kingdom. In an email to “tenants” in London, the company said it remains fully committed to providing its services and plans to remain in the vast majority of buildings.
We are committed to communicating first and in advance with members if we foresee possible changes, the company highlighted.
As of the end of June, the company had more than 700 sites worldwide and about 730,000 members. Through a statement on Monday night (6), the company said that bankruptcy protection will allow it to further rationalize its commercial office rental portfolio, while at the same time trying to guarantee continuity for its users.
David Tolley, chief executive of WeWork, said he is deeply grateful for the support of our stakeholders financial institutions, while working together to strengthen the capital structure and accelerate the process through the restructuring support agreement.
WeWork, founded in 2010, rents office space where people and businesses can rent and share space on a short-term basis. It became known for offering unlimited alcoholic drinks in its offices, in addition to a cheerful and relaxed decor.
Demand for the company’s shared office space took a hit after a disastrous effort in 2019 to raise money in a public listing, which damaged its reputation. Furthermore, the pandemic arrived and with people working from home, it caused the closure of many offices around the world.
In the first half of this year, WeWork lost more than a billion dollars due to operating expenses for its offices, as well as other costs. Coping with an unwillingness to act like a big technology company, the company has struggled to sell parts of its business and pressed to close locations or renegotiate terms on leases and long-term debt.
The company’s huge losses and internal dealings were well covered in the media, including the Apple TV series ‘WeCrashed’, which starred Anne Hathaway and Jared Leto as Rebekah and Adam Neumann, featured several scenes depicting the partying habits of its charismatic co-founder, while He builds the symbol of the “cool office” on a property in New York City.
Potential investors also questioned the links between Neumann’s personal finances and WeWork, given his decision to expand WeWork into areas of personal interest, such as a surf park business. Last month, as discussions with landlords and lenders intensified, WeWork told investors it was not making payments on its loans.
The main shareholder SoftBank, a Japanese technology conglomerate, pumped tens of billions of dollars into WeWork as it continued to lose money. As expectations of a bankruptcy filing loomed, Neumann said WeWork’s fall was disappointing.
It’s been a challenge for me to watch since 2019 how WeWork has failed to take advantage of a product that is more relevant than ever today. I believe that with the right strategy and team, a reorganization will allow WeWork to make a successful comeback, Neumann said.
*With information from BBC News.
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