We-Work bankruptcy: How will WeWork bankruptcy filing affect its operations in countries around the world, including the UK?

Office sharing company WeWork has filed for Chapter 11 bankruptcy protection

Co-working space WeWork has filed for bankruptcy in the US and Canada.

Here we look at which WeWork spaces are likely to be affected around the world.

Why has WeWork gone into bankruptcy?

The WeWork logo is displayed outside of a shared commercial office space building in Los Angeles, California.

The company filed for Chapter 11 bankruptcy protection in New Jersey, as part of what it described as a “comprehensive reorganisation” of its business, which has suffered financial problems for some time.

However, it said said creditors holding 92 percent of its secured debt had agreed on a restructuring plan that would include reducing its portfolio of office leases.

In August, the New York company – which was once valued as high as $47 billion (£38.1 billion) and went public in 2021 after its first attempt to do so two years earlier collapsed – sounded the alarm over its ability to remain in business and said it needed to improve its liquidity and profitability overall in the next year.

In September, when WeWork announced plans to renegotiate nearly all of its leases, chief executive David Tolley said the company’s lease liabilities accounted for more than two-thirds of its operating expenses for the second quarter of this year — remaining “too high” and “dramatically out of step with current market conditions”.

The company is believed to have struggled with increased remote working following the pandemic and the departure of its founder, Adam Neumann, who resigned in September 2019 during the failed public listing.

What will this mean for its offices around the world?

The bankruptcy filing applies only to WeWork’s business in the US and Canada – all other countries in which WeWork operates, including where there are franchise or joint venture operations, are not involved.

On June 30, the latest date with property numbers disclosed in securities filings, WeWork had 777 locations in 39 countries.

According to the filing, WeWork is requesting the “ability to reject the leases of certain locations” in the US and Canada, which the company says are largely non-operational. In short, this means that most offices it plans to close already do not have tenants.

However, it has not given a full list of which work spaces are likely to close – and said instead that all affected members have received advanced notice of its plans.

In a message sent to WeWork members in the UK, chief executive Mr Tolley said: “Please note, this process is not happening in your country and we expect there to be no changes to WeWork’s operations there.”

Mr Tolley, who joined WeWork’s board of directors earlier this year, only officially took up the role of chief executive earlier this month, after becoming interim chief executive in May.

He added: “Our vision for WeWork is clear and we are on a mission to continue as the leading global flexible space provider by delivering best-in-class services and products to our members.”

In a separate message published on its website, the company added: “WeWork is here to stay. Our spaces are open and operational, and our team is here to serve you. Throughout this process, WeWork spaces will continue to be operated to the highest standard.”