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Co-working giant WeWork’s future in ‘substantial doubt’

WeWork Spinningfields, Manchester, courtesy Manchester 001

WeWork, the flexible office trailblazer once hailed as the future of hybrid working, has cast “substantial doubt” over its future.

The company, which features four locations in Manchester among its network of office space for short-term rent or co-working in some of the world’s busiest cities, as well as 50 in the capital, saw its shares fall by 24 per cent by close of the NYSE last night after it said it needed to raise additional capital to keep it afloat over the next 12 months.

WeWork, which is backed by Japanese tech giant Softbank, was hit hard by the pandemic as social distancing rules drove people to work from home rather than its high-spec co-working sites.

Even as restrictions have lifted, the company is yet to turn a profit, and in a statement yesterday WeWork said it faced challenges including softer demand and a “difficult” operating environment.

It added that “Substantial doubt exists about the company’s ability to continue as a going concern,” and “The company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”

The plan involves raising additional capital through issuing stocks or bonds, or asset sales, as well as seeking to negotiate reduced leases on its properties and limit capital expenditures, WeWork said.

WeWork currently has over 500,000 members at workspaces in 33 countries around the world.

WeWork listed in New York in 2021 with a value of $9bn – around 20 per cent of its valuation when it unsuccessfully attempted to float previously in 2019.

In March, WeWork said it had struck deals with Softbank and other investors to reduce its debt by around $1.5bn.

Shares in the company have fallen by more than 95 per cent in the last year, and sat at $0.21 at yesterday’s close. They had traded at over $13 in August 2021, and were valued at close to $6 as recently as August 2022.

Workers in Manchester eager to help swell the company’s coffers in hard times may be pleased to learn that WeWork is currently offering three-months rent-free at “selected private offices” on its website, although as always terms and conditions apply.

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