WeWork, a company that offers workspace solutions from personal desks and private offices to coworking spaces, event spaces and business mailing addresses with package handling services, has filed for Chapter 11 bankruptcy protection.
The company went public in October 2021 and was valued at $47 billion at one point before investors started to drop off due to ousted CEO and Founder Adam Neumann’s inconsistent conduct and extravagant expenditures. Japan’s SoftBank stepped in to keep WeWork afloat, acquiring majority control over the company.
In August 2023, the company raised the red flag on its ability to stay in business.
The company rents out properties, partitioning them into office spaces for subletting to its clientele, including small enterprises, startups, and freelancers seeking flexibility without the commitment of permanent office rentals.
As of June 30, WeWork had 777 systemwide locations across 39 countries, the company said in a recent earnings call. Of that, WeWork reported supporting 906,000 workstations and 653,000 physical memberships — equating to 72% physical occupancy. A slight decline from the 75% physical occupancy seen at 779 systemwide locations WeWork reported operating at the end of 2022.
The COVID-19 pandemic notably led to rising vacancies in office space as working from home became increasingly popular. Major Canadian markets such as Vancouver, Montreal and Toronto, where WeWork has offices, still need to recover.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” CEO David Tolley said in a prepared statement. “We defined a new category of working, and these steps will enable us to remain the global leader in flexible work.”