WeWork goes bankrupt, capping co-working company’s downfall

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WeWork Inc., a former high-flying startup, has filed for bankruptcy in New Jersey, marking a fresh low for the co-working company. In its Chapter 11 petition, WeWork stated that its assets and liabilities range from US$10 billion to US$50 billion. This filing will allow the company to continue operations while it works out a plan to repay its debt.

The issue of bankruptcy has been an ongoing one for WeWork. Back in early 2023, an ambitious debt restructuring deal was made – however, the company soon found itself in dire straits again. In August of the same year, it had to admit there was “substantial doubt” about its operational sustainability. It then went on to announce it would renegotiate virtually all the leases and withdraw from “underperforming” locations.

As of June 30, 2021, WeWork had an expansive real estate footprint of 777 locations across 39 countries, with occupancy levels similar to 2019. Despite this, the business still remains unprofitable.

Two years prior, WeWork had planned an initial public offering (IPO). In the end, though, it was scuppered by investor doubts linked to the company’s governance, valuation, and growth prospects. As a consequence, founder Adam Neumann had to step down from his position as chief executive officer, resulting in a drastic plummet in WeWork’s valuation, which, at one point, had been as high as US$47 billion.

The coronavirus pandemic and its resulting challenges to working habits have caused other shared office space enterprises to struggle. Knotel Inc. and IWG Plc’s subsidiaries both declared bankruptcy in 2021 and 2020, respectively.