Office-sharing firm WeWork is set to close some of its buildings around the world, with the number set to shut in the UK as yet unknown.
It has been confirmed, however, that WeWork Blackfriars on London’s Southbank will close, as members based there have received an email telling them the company was closing “unprofitable” sites. They told the BBC they had been asked to leave the building by 30 November.
The move would be part of what the company called its “previously announced strategy to improve liquidity and strengthen our balance sheet.”
This may mean renegotiating many of its leases for buildings around the world, as it tries to solve problems caused by rapid expansion, increasing interest rates, a disastrous attempt to sell shares to the public and the exit of its co-founder.
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WeWork told the BBC it was “fully committed” to the UK and Ireland, but declined to comment on reports it was set to enter Chapter 11 bankruptcy proceedings in the United States.
As of the end of June, the firm had more than 700 locations in 39 countries around the world.
The company has been in difficulties since 2019 when its plans to become listed on the stock market fell apart as investors signalled doubts over its business model of taking long-term leases and renting them for the short term, against a background of substantial losses and the growth of homeworking. The company had already been making redundancies, some being announced at a party at which band Run DMC performed.
WeWork eventually went public in 2021 at a much-reduced valuation. Its major backer, Japanese conglomerate SoftBank, moved to support the startup, but the company has continued to lose money.
The firm has seen its share price plunge by almost 99% in the last year.
In August, WeWork raised “substantial doubt” about its ability to continue operations.
Numerous top executives have left the firm in the past six years, including CEO Sandeep Mathrani, who quit the firm this year.
The company has continued operating as executives sold off some businesses, cut jobs and cancelled or modified hundreds of leases, trying to stem the firm’s losses before it ran out of money.
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