The move represents an admission by SoftBank,the Japanese technology group that owns about 60 per cent of WeWork and has invested billions of dollars in its turnaround,that the company cannot survive unless it renegotiates its pricey leases in bankruptcy.
WeWork’s real estate footprint sprawled across 777 locations in 39 countries as of June 30,with occupancy near 2019 levels. But profitability has remained elusive as the company grapples with its expensive leases and corporate clients cancelling because some employees work from home. Paying for space consumed 74 per cent of WeWork’s revenue in the second quarter of 2023.
Locations apart from the US are not part of the bankruptcy process. Franchisees around the world are not affected,and WeWork said it would keep servicing members,vendors,partners,and other stakeholders as part of ordinary business.
A spokesman for WeWork in Australia,which has branches in Sydney,Melbourne,Perth and Brisbane,said it was “business as usual”. “Australia remains a key market for WeWork.”
WeWork said this month it would close offices at 66 King Street,in the Sydney CBD,and 50 Miller Street,North Sydney,as part of a global push by the co-working operator to renegotiate leases.
In 2021,the company also gave up locations in Melbourne,Sydney and Perth in response to pandemic lockdown crunches.
WeWork reported estimated assets and liabilities ranging from $US10 billion ($15.5 billion) to $US50 billion,according to a bankruptcy filing,which allows the company to keep operating while it works out a plan to repay its debts.