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WeWorked until we didn’t.
Office-sharing company and former startup darling WeWork filed for Chapter 11 bankruptcy on Monday, in the coda to one of the most remarkable corporate downfalls in recent memory.
While WeWork’s fall would have shocked analysts at the time of its former $47 billion valuation, the company’s recent years made a bankruptcy filing all but inevitable.
In Monday’s announcement, WeWork said it entered “a restructuring support agreement” with holders to “drastically reduce” the company’s debt. The bankruptcy filing only pertains to WeWork’s locations in the US and Canada, according to the company.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” CEO David Tolley said in the release.
It’s the end of an era for the one-time tech standout. WeWork suffered two body blows, in quick succession: its mangled IPO attempt and the pandemic.
In 2019, the company tried (and dramatically failed) to go public. Amid that IPO process, WeWork co-founder and former CEO Adam Neumann, who had become known for reckless spending and eccentric behavior, was forced out of the company.
The company eventually went public in 2021 as part of a SPAC, at a much lower $9 billion valuation. By that time, the pandemic had also upended WeWork’s model, as coworking spaces lost their luster in the age of remote work and many companies ended their leases.
In short, it’s been a long time coming. WeWork shares have dipped around 98% this year alone. And in a regulatory filing this August, the coworking company bankruptcy was a possibility, citing “losses and negative cash flows from operating activities.”
For all its apparent inevitability, former CEO Neumann called the bankruptcy filing “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,” Neumann told CNBC. “I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”