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

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WeWork Inc., the once high-flying startup, has filed for bankruptcy, in a dramatic low turn for the co-working company. Its Chapter 11 petition was filed in New Jersey and listed both assets and liabilities in the range of US$10 billion ($13.5 billion) to US$50 billion. The filing allows WeWork to keep operating while it works out a plan to repay its debts.

The pandemic and its failed 2019 initial public offering (IPO) had left WeWork struggling to recover, and in early 2023 it had already reached a sweeping debt restructuring deal. Nevertheless, the company found itself in trouble again in August when it said there was “substantial doubt” about its ability to continue operating. Weeks later, it announced it would withdraw from “underperforming” locations, and renegotiate nearly all its leases.

At its peak, the company’s real estate footprint had spanned 777 locations in 39 countries as of June 30. Despite this, it remains unprofitable – a fact that has not been helped by its failed public offering two years prior. This had led to the resignation of founder Adam Neumann as CEO, and a sharp dip in WeWork’s valuation, which once stood as high as US$47 billion.

Unfortunately, WeWork is not the only shared office space firm to have suffered from the pandemic. Knotel Inc. and subsidiaries of IWG Plc also sought bankruptcies in 2021 and 2020 respectively.