Washington: Beleaguered shared office giant WeWork, which has been in dire financial straits for years, announced Monday that it had filed for bankruptcy in a bid to negotiate down its debt.
The company said its bankruptcy impacts operations in the United States and Canada, but "global operations are expected to continue as usual."
"Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet," WeWork chief executive David Tolley said in a statement.
"We defined a new category of working, and these steps will enable us to remain the global leader in flexible work."
In early August, WeWork had warned the US stock market regulator (SEC) that it feared for its survival: "Substantial doubt exists about the company's ability to continue as a going concern."
The cause, according to the company: financial losses, liquidity needs and a drop in the number of tenants. It had explained that it had lost billions of dollars in the first six months of 2023, due to a drop in demand linked to poor economic conditions.
Ratings agency S&P said November 1 that WeWork is in "selective default" after failing to meet conditions set by debt holders.
WeWork had been a celebrated star in the sharing economy that put a mammoth footprint in the commercial real estate of major cities around the globe.
But investors tired of its messianic then-chief executive Adam Neumann, massive operating costs and lack of profits in 2019, when it tried to go public with a massive valuation of $49 billion.
Neumann was axed that year, albeit with a golden parachute, but WeWork's slide only accelerated during the Coronavirus pandemic and the rise of telecommuting.
WeWork's shares were worth just 80 cents at the close of trading on the New York Stock Exchange on Monday evening, for a market capitalization of $44.5 million.