WeWork is planning to file for bankruptcy as early as next week, according to a source familiar with the matter. The company has been struggling for months, and its valuation has plummeted from $47 billion in 2019 to just $2.5 billion today.
WeWork’s problems began when it tried to go public in 2019. Investors were skeptical of the company’s business model and its high valuation. The IPO was eventually scrapped, and WeWork was forced to lay off thousands of employees.
The COVID-19 pandemic has made WeWork’s problems even worse. Many businesses have shifted to remote work, and demand for office space has declined. WeWork has been forced to negotiate lower rents with its landlords, and it has also had to offer discounts to its members.
WeWork is now facing a mountain of debt. The company has over $10 billion in debt, and it is burning through cash at a rate of over $1 billion per year. WeWork is running out of options, and bankruptcy is now its only way to survive.
Bankruptcy will allow WeWork to restructure its debt and cut costs. The company may also be able to sell some of its assets to raise cash. If WeWork is successful in restructuring, it could emerge from bankruptcy a stronger company. However, there is also a risk that WeWork could be liquidated, and its members could lose their money.
The bankruptcy of WeWork would be a major blow to the coworking industry. WeWork is the largest coworking company in the world, and its collapse would send shockwaves through the industry.
It is unclear how other coworking companies will be affected by WeWork’s bankruptcy. However, it is likely that the industry will become more competitive, and that prices will come down.