WeWork will focus “on business continuity and delivering best-in-class services to its members, as global operations are expected to continue as usual,” it said.
The decision reflects years of staggering financial losses and WeWork’s drawn-out struggles to fill office spaces, which were worsened by the coronavirus pandemic.
WeWork warned that it was at risk of bankruptcy in August after recording a net loss of $700 million in the first six months of the year and $10.7 billion in net losses in the previous three years. Weeks later, David Tolley, its interim chief executive, said WeWork would renegotiate “nearly all” of its leases to cut costs.
Last week, credit ratings agencies S&P Global Ratings and Fitch downgraded WeWork’s ratings after the company failed to meet interest payments that were due in early October. Fitch said WeWork has projected growth and cost reductions that would lead to break-even results in 2021 and 2022, but that WeWork’s performance had been “consistently worse than projections.”
WeWork is “still burning cash,” despite recent cost-saving moves through “reduced head count and lease terminations,” Fitch said.