WeWork (WE), the company that provides shared communal workspaces in urban settings, has warned that it may file for bankruptcy.
The New York City-based company thrived during the early days of the pandemic and was once valued at $40 billion U.S.
However, WeWork said in a filing with the U.S. Securities and Exchange Commission (SEC) that mounting losses and negative cash flows are raising doubts about its ability to “continue as a going concern.”
The prolonged Covid-19 pandemic, which led many businesses to give up their leases in favor of permanent remote work arrangements, has left WeWork with nearly $3 billion U.S. of debt and struggling to generate cash to continue operations, said the company.
WeWork reported a net loss in the first half of this year of $700 million U.S. after losing $2.3 billion U.S. for all of 2022. As of June 30, the company had $205 million U.S. of cash on hand.
WeWork’s CEO Sandeep Mathrani left the company in May of this year and his successor has not yet been named. Last week, three members of the company’s board of directors resigned.
In 2021, WeWork went public through a merger with a special purpose acquisition company (SPAC). Since then, the company’s stock has declined 98% to trade at $0.21 U.S. per share.