Co-work giant files for bankruptcy, cutting locations in N.A. while growth continues globally
Co-work industry leader WeWork Inc. has filed for U.S. and Canadian bankruptcy protection, and several Canadian locations are on the chopping block as a result.
WeWork announced Monday in a press release that it plans to “drastically reduce” its debt through restructuring strategies with stakeholders, which will include attempting to reject the leases on almost 70 locations in North America. Franchises outside of the U.S. and Canada will not be affected, as “global operations are expected to continue as usual.”
The 69 potential closures will be focused on locations that are “largely non-operational”, including two in Toronto, two in Vancouver, and one in Burnaby, CBC reported. Most of the others are located in New York.
“It is the WeWork community that makes us successful. Our more than half-million members around the world turn to us for the best-in-class spaces, hospitality, and technology that our 2,500 dedicated employees and valued partners provide. WeWork has a strong foundation, a dynamic business, and a bright future,” said David Tolley, CEO of WeWork, in the statement.
Work-from-home contributes to decline of co-work spaces
In addition to rising interest rates, WeWork has been affected by the increase in workers who have chosen to work from home since the COVID-19 pandemic, CBC reported.
The restructuring deal will hopefully save the company USD$3 billion, Tolley said, as lease liabilities currently make up two-thirds of WeWork’s debt.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” Tolley said.
“We defined a new category of working, and these steps will enable us to remain the global leader in flexible work.”
