Current:Home > NewsWeWork files for bankruptcy in a stunning downfall from its $47 billion heyday-VaTradeCoin
WeWork files for bankruptcy in a stunning downfall from its $47 billion heyday
lotradecoin supported cryptocurrencies list View Date:2024-12-25 22:26:32
WeWork, the once-buzzy startup that was valued at $47 billion at its peak, filed for Chapter 11 bankruptcy protection on Monday in federal court in New Jersey.
In its bankruptcy petition, the company listed assets and liabilities between $10 and $50 billion. The company said 92% of its lenders agreed to a restructuring plan that would allow WeWork to operate during the reorganization.
"As part of today's filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice," said WeWork Chief Executive David Tolley in a statement.
The bankruptcy filing marks a staggering new low for the company, which at its heyday won billions of dollars in funding from deep-pocketed investors for putting a Silicon Valley spin on the less-flashy business of subleasing office space to workers.
A vision for office work never fully realized
Erratic, flamboyant and sometimes-barefoot founder Adam Neumann launched WeWork in 2010. It expanded at a breakneck pace and attempted to revolutionize the way people work, a lofty goal that was never fully realized.
Neumann described WeWork as "the world's first physical social network," with office spaces featuring sleek furnishings, minimal design and, often, kombucha and beer on tap. He had hoped to draw both freelancers working remotely and office workers to WeWork sites, forming a global community that believed in "the energy of We" with an aspiration to "elevate the world's consciousness."
But the New Age-y declarations were toppled by a more mundane reality: an inability to pay its bills.
WeWork spent gobs of money remodeling office spaces around the world on long-term leases, with the goal of making a profit on very short-term subleases.
Problems arose, however, when it became clear that Neumann had no real plan for leasing its enormous portfolio of spaces many years out.
There was too much space on long-term leases and far fewer workers available to fill it. And so, the business model came crashing down, dragging Neumann down with it.
In 2019, after WeWork's valuation was reduced to $7 billion, WeWork laid off thousands of workers and Neumann was ousted. It followed Neumann's botched attempt to take the company public.
An attempt to set WeWork on a new path
Following Neumann's resignation, former real estate executive Sandeep Mathrani took over the company and attempted to right the ship.
He cut costs and laid off employees as he steered WeWork the pandemic, an especially punishing time for companies in the business of leasing out office space.
Mathrani even managed to take WeWork public, but earlier this year, he abruptly stepped down.
The company has been beset with trouble since then.
In August, WeWork said there was "substantial doubt" about its ability to stay in business due to mounting financial losses and a lack of cash.
It scrambled to renegotiate lease terms with landlords. But it faced increased competition in the world of short-term office space. And with many office workers choosing to work from home, the company failed to regain its footing.
In October, WeWork shares fell to an all-time low after the company admitted that it did not have enough cash on hand to make an interest payment on its debt.
Despite its reduced size since the Neumann years, WeWork still maintained more than 700 locations in nearly 40 countries, according to a Securities and Exchange Commission filing from June.
veryGood! (9793)
Related
- Through 'The Loss Mother's Stone,' mothers share their grief from losing a child to stillbirth
- Cody Bellinger re-signs with Chicago Cubs on three-year, $80 million deal
- 2024 SAG Awards: Josh Hartnett Turns Attention to Oppenheimer Costars During Rare Interview
- The Swiftie-hood of the traveling jacket: 'Dave's Jacket' travels to 46 Eras shows
- When does 'No Good Deed' come out? How to watch Ray Romano, Lisa Kudrow's new dark comedy
- From Brie Larson to Selena Gomez: The best celebrity fashion on the SAG Awards red carpet
- Oppenheimer movie dominates SAG Awards, while Streisand wins lifetime prize
- Grammy winner Allison Russell discusses controversy surrounding Tennessee lawmakers blocking a resolution honoring her
- Gen Z is 'doom spending' its way through the holidays. What does that mean?
- Kelly Clarkson, Oprah Winfrey and More Stars Share Candid Thoughts on Their Weight Loss Journeys
Ranking
- Trump will be honored as Time’s Person of the Year and ring the New York Stock Exchange bell
- From 'The Holdovers' to 'Past Lives,' track your Oscar movie watching with our checklist
- List of winners at the 30th Screen Actors Guild Awards
- Will 'Blank Space' chant continue after Sydney on Eras Tour? Taylor Swift's team hopes so
- Manager of pet grooming salon charged over death of corgi that fell off table
- SAG Awards 2024 winners list: 'Oppenheimer' wins 3, including outstanding ensemble cast
- You Can't Miss Emma Stone's Ecstatic Reaction After Losing to Lily Gladstone at the 2024 SAG Awards
- Alpha Elite Capital (AEC) Business Management
Recommendation
-
How to watch the 'Blue Bloods' Season 14 finale: Final episode premiere date, cast
-
Lithium ion battery caused fatal fire in New York City apartment building, officials say
-
What you didn't see on TV during the SAG Awards, from Barbra Streisand to Pedro Pascal
-
Leaders are likely to seek quick dismissal as Mayorkas impeachment moves to the Senate
-
How to watch 'A Charlie Brown Christmas' for free: Special date, streaming info
-
Sports figures and celebrities watch Lionel Messi, Inter Miami play Los Angeles Galaxy
-
Why ex-NFL player Shareece Wright went public with allegations he was sexually assaulted by Tiffany Strauss
-
The tooth fairy isn't paying as much for teeth this year, contrary to market trends