WeWork files for bankruptcy after failing to meet its $18.6 billion debt obligations
Co-working and flexible office space provider WeWork has plunged from its $47 billion glory days, filing for bankruptcy at a New Jersey federal court.
WeWork, a once-promising startup that aimed to revolutionize the way people work by providing flexible workspace, has filed for bankruptcy protection in federal court in New Jersey. In its petition, the company stated that it had some $15 billion in assets, more than $18 billion in debt and around $100 million in unpaid rent.
The company was crippled by the mountain of debt and steep losses due to the drop in demand for office space as customers sought to cut costs.
The co-working and flexible office space provider offered shared workspaces, private offices, and various services to entrepreneurs, freelancers, startups, small businesses, and large corporations. Founded in 2010, WeWork was once the most valuable startup in the country.
READ ALSO: How will the 2024 fast food $20 minimum wage increase affect prices
WeWork’s eccentric leader
Founded by charismatic entrepreneur Adam Neumann and his wife Rebekah Neumann, the company grew to become one of the most well-known companies in the co-working industry, reaching a worth of $47 billion by courting funding from blue-chip investors such as SoftBank and venture capital firm Benchmark, along with big Wall Street Banks like JPMorgan Chase.
WeWork faced various challenges and changes in its business model over the years, its rapid expansion and subsequent financial losses garnering significant attention and scrutiny.
READ ALSO: Every Amazon Style store across the US to close this week
The beginning of the end for WeWork
The company began to crash after it tried to launch an IPO in 2019 with Neumann at the helm. The planned sale of shares failed miserably after investors brought up WeWork’s monumental losses and were put off by Neuman’s leadership style.
Covid-19 brought more woes to the company, as it was saddled with expensive leases as people began working from home and continued to do so even after the pandemic.
The company’s meteoric rise and fall was detailed in a TV series entitled “WeCrashed”, which featured Oscar-winning actors Jared Leto as Neumann and Anne Hathaway as Rebekah.