WeWork could file for bankruptcy as early as next week, as the possible end of the company is getting closer.
The company, which offers flexible and shared office spaces in 119 cities around the world, was once valued at a whopping $47 billion. The story of its sketchy leadership and financial problems has been public for several years, but gained even more attention in 2022 with the Apple TV+ series WeCrashed, which dramatized its demise.
Now, according to a Wall Street Journal According to the report, WeWork now appears to be preparing to file a Chapter 11 petition in New Jersey. The news comes in the same week that the company confirmed it would withhold interest payments on some notes to help the company’s finances.
The company, which is backed by SoftBank Group, saw shares fall 32% in extended trading after the news first broke, and fell another 35% in premarket trading today. This year the total is down 96%.
a Form 8-K confirms: “The company has elected to withhold the interest payment of approximately $6.4 million, payable in cash.”
Reuters reported that WeWork had net long-term debt of $2.9 billion as of June 2023, and more than $13 billion in long-term leases.
The company has not only faced significant challenges due to co-founder and ex-CEO Adam Neumann, but has also lost a significant portion of its potential customers in the wake of the pandemic.
Employees around the world were sent home in 2020, and while many companies have now reintroduced office work requirements, they are also struggling with rising costs and falling expenses, including their own office footprint.