[Global] WeWork files for bankruptcy in the US

WeWork, the headline-making co-working space firm once valued at $47bn has been forced to file for bankruptcy in the US, BBC News reports.

The decision is the latest dramatic chapter in the saga of a company once seen as the future of the workplace.

WeWork's filing will reportedly grant it protection from creditors and landlords as it restructures its vast debts.

After a meteoric rise and infamous fall, WeWork is now worth less than $50m, based on its latest share price.

The bankruptcy will affect the company's business in the US and Canada. WeWork stated that its co-working spaces - including those in the UK - remained open and operational.

In an email to tenants in London seen by the BBC, WeWork said it remained "fully committed" to providing its services and planned to remain "in the vast majority of our buildings".

"We are committed to communicating with members first and early should we foresee potential changes," it said.

Recent BBC reporting revealed that WeWork was shuttering at least one office on the capital's South Bank as it grapples with its finances.

On November 7, one UK tenant told the BBC it was "certainly considering our options and looking at other co-working spaces".

Paul Frampton-Calero - global president at consulting business Control v Exposed - said the firm's 30 staff spread across multiple cities had appreciated the flexibility, larger meeting rooms and events at WeWork.

However, he said WeWork risks losing its tenants to competitors if it starts cutting back on members' perks and events to save money.

"The challenge for WeWork is that there are now a multitude of alternatives so the early differentiation they relied on is no longer a strength," Mr Frampton-Calero said.

"Even if they continue trading for a period, I'm sure many businesses are already weighing up their options so I'd expect them to see an increase in churn."

WeWork had more than 700 sites around the world and about 730,000 members, as of the end of June.

What happened?

The loss-making firm has billions of dollars in liabilities. In a November 6 statement, it said that bankruptcy protection would allow it to "further rationalise its commercial office lease portfolio" while trying to ensure continuity for its users.

David Tolley - WeWork's chief executive - reportedly said he was "deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement".

In the first half of this year, WeWork lost more than $1bn, weighed down by the expense of operating its offices, as well as other costs.

Dealing with the consequences of behaving like a big tech business, the company has reportedly been scrambling to sell off parts of its business and pushing to shut locations or renegotiate the terms of long-term leases and debts.

Potential investors also questioned the links between founder Adam Neumann's personal finances and WeWork, together his decision to expand WeWork into areas of personal interest, such as a surf park business.

In October, as discussions with landlords and financiers intensified, WeWork told investors it was not making payments on its loans.

Major shareholder Japanese technology conglomerate SoftBank pumped tens of billions of dollars into WeWork as it continued to lose money.

As anticipation of a bankruptcy filing emerged, Mr Neumann described the fall of WeWork as "disappointing".

"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before," Mr Neumann said.

"I believe that, with the right strategy and team, a reorganisation will enable WeWork to emerge successfully."

Source: BBC News

(Links and quotes via original reporting)

WeWork, the headline-making co-working space firm once valued at $47bn has been forced to file for bankruptcy in the US, BBC News reports.

The decision is the latest dramatic chapter in the saga of a company once seen as the future of the workplace.

WeWork's filing will reportedly grant it protection from creditors and landlords as it restructures its vast debts.

After a meteoric rise and infamous fall, WeWork is now worth less than $50m, based on its latest share price.

The bankruptcy will affect the company's business in the US and Canada. WeWork stated that its co-working spaces - including those in the UK - remained open and operational.

In an email to tenants in London seen by the BBC, WeWork said it remained "fully committed" to providing its services and planned to remain "in the vast majority of our buildings".

"We are committed to communicating with members first and early should we foresee potential changes," it said.

Recent BBC reporting revealed that WeWork was shuttering at least one office on the capital's South Bank as it grapples with its finances.

On November 7, one UK tenant told the BBC it was "certainly considering our options and looking at other co-working spaces".

Paul Frampton-Calero - global president at consulting business Control v Exposed - said the firm's 30 staff spread across multiple cities had appreciated the flexibility, larger meeting rooms and events at WeWork.

However, he said WeWork risks losing its tenants to competitors if it starts cutting back on members' perks and events to save money.

"The challenge for WeWork is that there are now a multitude of alternatives so the early differentiation they relied on is no longer a strength," Mr Frampton-Calero said.

"Even if they continue trading for a period, I'm sure many businesses are already weighing up their options so I'd expect them to see an increase in churn."

WeWork had more than 700 sites around the world and about 730,000 members, as of the end of June.

What happened?

The loss-making firm has billions of dollars in liabilities. In a November 6 statement, it said that bankruptcy protection would allow it to "further rationalise its commercial office lease portfolio" while trying to ensure continuity for its users.

David Tolley - WeWork's chief executive - reportedly said he was "deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement".

In the first half of this year, WeWork lost more than $1bn, weighed down by the expense of operating its offices, as well as other costs.

Dealing with the consequences of behaving like a big tech business, the company has reportedly been scrambling to sell off parts of its business and pushing to shut locations or renegotiate the terms of long-term leases and debts.

Potential investors also questioned the links between founder Adam Neumann's personal finances and WeWork, together his decision to expand WeWork into areas of personal interest, such as a surf park business.

In October, as discussions with landlords and financiers intensified, WeWork told investors it was not making payments on its loans.

Major shareholder Japanese technology conglomerate SoftBank pumped tens of billions of dollars into WeWork as it continued to lose money.

As anticipation of a bankruptcy filing emerged, Mr Neumann described the fall of WeWork as "disappointing".

"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before," Mr Neumann said.

"I believe that, with the right strategy and team, a reorganisation will enable WeWork to emerge successfully."

Source: BBC News

(Links and quotes via original reporting)