WeWork collapsed on Wall Street and is rapidly approaching Chapter 11, the restricted bankruptcy procedure provided by the US Code to avoid a total disaster: 777 offices in 39 countries, which supported approximately 906 thousand workstations. In Italy, there are five offices and all are in Milan.
Founded in New York in 2010 with the idea of creating an environment where people and companies can work together, the American co-working space company revolutionized the world of work, but its paradigm was very short-lived. And it wasn’t just the 2020 pandemic that dealt the first blow to business. Valued at 47 billion dollars in 2019, the group controlled by SoftBank has already saved 5 billion in 2019 with the highest funding, which, after four years, has not yielded the desired results. Covid and smart jobs were the first to weigh on the business, followed by high interest rates that made debt unsustainable: As of June 30, the company had burned through $530 million in the first six months of $2.9 billion. 696 million.
High rents and low space utilization have created a perfect storm: the stock lost more than 40% on Wall Street yesterday. According to the WSJ, WeWork has yet to pay interest to its bondholders, so it may file for Chapter 11 bankruptcy soon. The New York-based company is considering filing for bankruptcy next week in New Jersey. WeWork has not yet commented on the rumours, but is in talks with some bondholders and has already begun a 30-day period to improve its balance sheet and estate portfolio”, receiving a seven-day extension.
At the time of the mid-year results, the company had already highlighted its financial problems, citing “oversupply in the commercial real estate sector, growing competition in flexible spaces and macroeconomic volatility that led to weaker-than-expected demand”.
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