WeWork in danger as landlords on alert

Coworking provider WeWork is struggling to stay in business, with the company admitting there is “substantial doubt” it will be able to continue operating.

The New York-based property group blamed member churn, financial losses and a need for cash on the crisis.

The company went public in October 2021 to stave off a collapse following reckless spending from its co-founder and former chief executive Adam Neumann.

Due to the crisis at WeWork landlords who lease spaces to the firm are said to be approaching other office rental startups who can potentially take over if the firm goes bankrupt.

However its been a tougher market for all flexible spaces since the pandemic, which helped to drive a work from home culture and therefore hit demand.

WeWork has 63 locations across the UK, with 512 offices available to rent.

The company, founded in 2010, had a peak valuation of $47bn in January 2019, but that has since collapsed to just $400 million.

An impending IPO in 2019 exposed issues with WeWork, including creative accounting, excessive spending and concerns around Neumann’s leadership style.

Its model of acquiring long-term leases and then subleasing short-term was seen as inherently risky.

Then in 2020 the company was hit hard by the pandemic, and there’s been too much supply for demand ever since.

WeWork said: “Our losses and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern.”