WeWork to File for Bankruptcy “as Early as Next Week”

The NY-based firm has lost almost 98% of its stock market valuation, despite being valued at $47 billion in the past.

Office-sharing firm WeWork is likely to file for bankruptcy as early as next week, according to recent reports.

The New York-based firm, which was once valued at $47 billion, has lost almost 98% of its stock market valuation in the last year alone.

This news coincides with the steady rise of workers swapping city offices for sandy beaches, or switching to a 4-day workweek and no longer needing a traditionally full-time office space.


WeWork's Troubled History

Earlier this week the company let the US financial regulator know it had agreed with creditors to temporarily postpone payments for some of its debt. A day later, its shares fell by more than 40% during after-hours trading.

Concerns about WeWork’s debts, losses, and management, have plagued the company for some time now, leading to difficulty in it selling shares on the stock market back in 2019.  This comes despite tens of billions of dollars being pumped into the company from Japanese conglomerate, SoftBank.

As of June, the company’s net long-term debt had risen to $2.9 billion and more than $13 billion in long-term leases.

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However, trouble for the firm properly came to light back in August this year, when it raised “substantial doubt” that it could continue operations. A decrease in demand – likely a hangover from 2020’s work-from-home orders – alongside a “difficult” operating environment were behind this. 

Leadership Woes Blamed as a “Distraction”

The exit of several top executives this year has understandably contributed to instability across the firm.

A week before the company confirmed it had scrapped its share sale, founder Adam Neumann stepped down as Chief Executive. WeWork had said that scrutiny of his leadership had “become a significant distraction”.

Similarly, Chairman Sandeep Mathrani – who led the company as Chief Executive during the pandemic – left back in May. During his tenure he had eliminated $2.3 billion in costs and over $1 billion in debt.

WeWork's Reversal of Fortune

Some are attributing the remarkable reversal of fortune to WeWork’s 2019 plans to go public. Despite investors’ skepticism of taking long-term leases and renting them for a short-term time period, the company pressed on. 

Following the pandemic, it did manage to go public in 2021 but at a significantly reduced valuation. By the end of June, the firm reported having 777 locations in 39 countries.

WeWork has declined to comment or respond to press enquiries on these bankruptcy claims. 

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Written by:
Ellis Di Cataldo (MA) has over 9 years experience writing about, and for, some of the world’s biggest tech companies. She's been the lead writer across digital campaigns, always-on content and worldwide product launches, for global brands including Sony, Electrolux, Byrd, The Open University and Barclaycard. Her particular areas of interest are business trends, startup stories and product news.
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