Embattled office-sharing startup Wework may file for Chapter 11 bankruptcy in New Jersey as soon as next week, the Wall Street Journal has reported.
The company warned back in August 2023 that it had ‘substantial doubt’ that it could stay in business,
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The troubled startup, once valued at $47bn in January 2019, was dealt a decisive blow later that year with a failed initial public offering from its parent company, The We Company. The firm has since lost almost 98% of its stock market valuation.
The company faced criticism for its governance, business model and profitability. The startup faced difficulties during the pandemic as more people adjusted to working from home.
Long-time backer SoftBank threw WeWork a multibillion-dollar rescue package and co-founder Adam Neumann left the company as part of a last-ditch attempt to save the business.
In 2020, SoftBank reported a record $12.7bn annual loss as bad investments, including WeWork, were compounded by the coronavirus pandemic’s economic destruction.
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By GlobalDataSoftBank Vision Fund is reportedly using WeWork as a case study for what not to do with other investors, according to managing partner Jeff Housenbold. SoftBank CEO Masayoshi Son has also branded the investment “foolish”.
