New York: WeWork, a once high-flying startup that saw its fortunes plummet in the aftermath of the pandemic and its failed initial public offering (IPO) in 2019, has filed for bankruptcy.
The New York-based co-working company submitted a Chapter 11 petition in New Jersey, disclosing assets and liabilities ranging between $10 billion and $50 billion. This filing enables WeWork to continue its operations while it devises a strategy to settle its outstanding debts, reported Bloomberg.
In early 2023, the company managed to secure a comprehensive debt restructuring agreement; however, it quickly encountered difficulties once again. In August, WeWork raised concerns about its ability to maintain its operations, indicating "substantial doubt." Shortly thereafter, it revealed plans to renegotiate a substantial portion of its leases and exit "underperforming" locations.
As of June 30, WeWork maintained a vast real estate presence, spanning 777 locations across 39 countries, with occupancy levels nearing those of 2019. Nevertheless, the firm continued to operate at a deficit.
In 2021, the company went public through a merger with a special purpose acquisition company, finally realising an IPO after facing setbacks in 2019 due to investor apprehensions related to governance, valuation, and growth prospects. The failed IPO also led to the resignation of its CEO and a significant decline in WeWork's valuation, which had once reached an impressive $47 billion.
The co-working industry, much like WeWork, experienced difficulties in the wake of the pandemic as working patterns underwent substantial changes. Knotel Inc. and subsidiaries of IWG Plc faced bankruptcy in 2021 and 2020, respectively.