Since WeWork’s IPO, the company has faced mounting challenges from a shift to remote working with its latest statement raising concern over its future.
Shares of WeWork have fallen over 97% in value since it first launched with the firm struggling to service mounting debts, falling liquidity options and a drop in revenue.
Backed by Japanese tech firm Softbank, WeWork at its height was valued at $47 billion, but its market cap has collapsed to $450 million, with the company facing numerous challenges. It advised Tuesday in a statement to investors that it was now in “substantial doubt” on whether it could continue.
With more than 700 locations in 39 countries, WeWork reported that it had 906,000 workstations and 653,000 memberships, declining 1% year-on-year.
Following sharp interest rate hikes and companies reducing office space, there has been a large shift in work habits which has compounded WeWork’s woes, leading it to look for ways to drive costs down as its cash reserves diminish.
WeWork’s difficulties are evident when looking at cities like San Francisco and New York, where occupancy for office space has been falling, and companies are renegotiating their leases for commercial real estate.
This is also happening around the world in major cities including London, which has seen multinational firms like HSBC announce downsizing plans as more employees work remotely.
Could WeWork turn their fortunes around?