In a new low for the co-working industry, shared office space giant WeWork filed for bankruptcy On Nov. 6, listing nearly US$19 billion in debt.
In a shocking turn of events, co-working space giant WeWork has filed for bankruptcy following months of financial difficulties and leadership upheaval. The company, which once boasted a valuation of $47 billion, announced on Monday that it had entered into a Restructuring Support Agreement with creditors to reduce its massive debt and reorganize its operations.
The effects of the COVID-19 pandemic have taken their toll with a sudden shift towards telecommuting and social distancing, demand for co-working spaces plummeted.
WeWork announced its decision to file for Chapter 11 bankruptcy protection of New Jersey law, declaring assets worth US$15 billion. Now undergo major restructuring in an attempt to right its course. This includes further streamlining its office leasing portfolio and focusing on business continuity for its global operations.
In a statement, former CEO Neumann expressed disappointment at the company’s downfall, but remains hopeful that with the right strategy and leadership, WeWork can emerge successfully from this trying period. The bankruptcy filing will not affect the company’s franchises outside the U.S. and Canada, and it expects to continue its global operations.
With information from La República