WeWork has confirmed that it will file for bankruptcy, however it’s not being put off by its hefty financial challenges and remains committed to a future of flexible office spaces.
The firm said on November 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 struggles have been public knowledge for several years, and are partly the result of decisions made by ex-CEO Adam Neumann.
WeWork files for bankruptcy, remains operational
The SoftBank Group-backed flexible office space provider was once valued at $47 billion, but its attempt to go public failed drastically, and the company’s valuation plummeted.
Reuters reported that WeWork had net long-term debt of $2.9 billion in June 2023, and more than $13 billion in long-term leases.
In its latest announcement, the firm said: “WeWork will further rationalize its commercial office lease 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 of the U.S. and Canada are not part of this process. WeWork’s franchisees around the world are similarly not affected by these proceedings.”
Hinting at previous poor decisions, the now-CEO David Tolley said: “Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet.”
In the meantime, the office spaces remain open and operational and customers should remain largely unaffected, though it’s unclear what the future holds for WeWork and how its office space portfolio may change.
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