WeWork may file for bankruptcy as early as next week as a possible end to the company looms ever closer.
The company, which provides flexible and shared office spaces in 119 cities across the world, was once valued at a staggering $47 billion. The story of its sketchy leadership and financial troubles has been public for several years, but it came to even greater attention in 2022 with the Apple TV+ series WeCrashed, which dramatized its downfall.
Now, according to a Wall Street Journal report, WeWork now looks to be preparing to submit a Chapter 11 petition in New Jersey. The news comes in the same week that the company had confirmed it would withhold interest payments on some notes in order to help company finances.
WeWork failure
The company, which is backed by SoftBank Group, saw shares fall 32% in extended trading after the news first broke, and down again by 35% in premarket trading today. It is down 96% overall this year.
A Form 8-K confirms: “The Company has elected to withhold interest payment of approximately $6.4 million payable in cash.”
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.
Not only has the company faced major challenges brought on by its co-founder and ex-CEO, Adam Neumann, but it has also lost a significant proportion of prospective customers in the wake of the pandemic.
Workers around the world were sent home in 2020, and while many companies have now re-introduced office-working requirements, they are also battling with rising costs and reducing expenses, which includes their own office footprints.