The problems are piling up for WeWork: The shared workspace company informed tenants Monday that it has closed 2,300 phone booths at 223 sites in the US and Canada after detecting high levels of a cancer-causing chemical, reports Reuters. The company says it began testing for formaldehyde after a tenant complained of eye irritation and a bad smell after using one of the booths, which are more like enclosed cubicles than somewhere Clark Kent might get changed in. The company, which is believed to be rapidly running out of money, declined to identify the manufacturer of the phone booths or say how much it would cost to replace them. WeWork warned tenants that long-term exposure to the chemical has been "associated with certain types of cancers."
It's not clear when WeWork first became aware of the problem, but according to emails seen by Business Insider, Seattle tenant Xen Eldridge informed a WeWork manager on Aug. 29 that colleagues had told him that "using the phone booths for any time longer than 20 minutes leads to their eyes stinging, feeling lightheaded, and/or nauseous." Adam Neumann, the company's controversial CEO, stepped down last month after plans for an IPO failed amid mounting losses. Sources say the company is now in talks that could lead to Japanese investor SoftBank taking control. Insiders tell the Guardian that WeWork plans to lay off 2,000 staff, or around 13% of its workforce, as soon as this week—and many employees blame Neumann for the company's decline. (Read more WeWork stories.)