'The Clock Is Ticking Down for WeWork'

Once high-flying company warns it might go under
By John Johnson,  Newser Staff
Posted Aug 9, 2023 8:17 AM CDT
'The Clock Is Ticking Down for WeWork'
The WeWork logo at the entrance to one of their office spaces in the SoHo neighborhood of New York.   (AP Photo/Mary Altaffer, File)

It was once seen as the Next Big Thing. But on Wednesday, WeWork warned that it might cease to exist. The company that leases offices buildings, then rents out the space to businesses, expressed doubt about its ability to stay afloat, reports the Wall Street Journal. "As a result of our losses…which have been impacted by the recent increases in member churn ... substantial doubt exists about the company's ability to continue as a going concern," reads the company statement. WeWork was once valued at $47 billion, making it one of the most valuable startups in the world. It has since become a "cautionary tale in business schools," per the Washington Post. As in, the company's stock is down 95% since it went public in 2021.

The pandemic and the ensuing economic slump have been huge factors in WeWork's demise, notes CNBC. But the "erratic behavior and exorbitant spending" of founder Adam Neumann, who has since been ousted as CEO, also played a role, per the AP. (Read about Neumann's failed "exit plan" here.) The company posted a loss of $700 million in the first six months of 2023, on top of net losses of $10.7 billion in the previous three years, it said in a new filing to the SEC. "People who follow the company have been expecting this for a while," University of Michigan business professor Erik Gordon tells the Post. "The clock is ticking down for WeWork." (More WeWork stories.)

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