Co-working space provider WeWork, which was once valued at $47 billion, has been forced to file for a Chapter 11 bankruptcy in the US. The filing is set to provide the company with protection from its creditors and landlords as it restructures its vast debts. Based on its latest share price, WeWork is now worth less than $50 million.
Founded in 2010, WeWork operates by leasing office space that individuals and companies can rent and utilize on a short-term basis. The demand for their shared office spaces suffered a blow in 2019 due to a disastrous attempt to raise funds through a public listing, which tarnished their reputation and resulted in the removal of the company's founder, Adam Neumann. Subsequently, the COVID-19 pandemic further impacted the company as office closures became widespread, forcing many people to work remotely.
In the first half of the current year, WeWork reported a loss exceeding $1 billion, primarily due to the high operating expenses associated with their office locations, along with other financial burdens. By the end of June, the company had established a presence in more than 700 locations globally and had approximately 730,000 members.
The current filing will reportedly only affect the company's business in the US and Canada for now.
