The troubled office-sharing firm WeWork is to start closing some of its buildings around the world, the BBC understands.
The company, once valued at $47bn (£38.6bn), has seen its shares tumble following reports it could file for bankruptcy as early as next week. WeWork would not confirm exactly how many sites in the UK would close.
It did, however, say that it will shut one of its central London buildings close to Blackfriars station. The move would be part of what the company called “our previously-announced strategy to improve liquidity and strengthen our balance sheet.”
WeWork members at the building on London's Southbank told the BBC that they had been emailed by the company telling them it was closing “unprofitable” sites. They said they had been asked to be out of the building by 30 November and that WeWork had said it would find them “alternative workplace solutions”.
It comes as the firm grapples with financial struggles. On Tuesday, it told the US financial regulator it had agreed with creditors to temporarily postpone payments for some of its debt.
The BBC understands the company will now be looking to renegotiate many of its leases not just in the UK, but around the world, as it tries to solve problems caused by rapid expansion, increasing interest rates, a disastrous attempt to sell shares to the public and the exit of its co-founder.
In a statement to the BBC, WeWork said it was “fully committed” to the UK and Ireland, but declined to comment on reports it was set to enter Chapter 11 bankruptcy proceedings in the United States. As of the end of June, the firm had more than 700 locations in 39 countries around the world.
The New York-based firm has been struggling since its initial attempt to sell shares on the stock market collapsed in 2019 due to concerns about its debts, losses and management. A week before the company confirmed that its share sale had been scrapped, its founder Adam Neumann stepped down as chief executive.
Scrutiny of his leadership had “become a significant distraction,” the firm said. A few months after the listing debacle, the pandemic hit, sparking a revolution in remote work and exposing WeWork to public criticism from tenants looking to escape their leases.
But the company kept operating as executives sold off some businesses, cut jobs and cancelled or modified hundreds of leases, trying to stem the firm's losses before it ran out of money. WeWork finally listed on the New York Stock Exchange in 2021 with a much lower valuation than originally expected.
The Japanese conglomerate SoftBank has pumped tens of billions of dollars into WeWork as it continued to lose money. The firm has seen its share price plunge by almost 99% in the last year.
In August, WeWork raised “substantial doubt” about its ability to continue operations. At the time, the company said in a statement that it faced challenges including softer demand and a “difficult” operating environment.
— CutC by bbc.com
