AUGUST 24, 2023 — BANKRUPCY EMINENT?
From the Wall Street Journal …
BlackRock, King Street, Brigade, and other firms are holding preliminary discussions about WeWork’s future, as the company tries to reduce its rent costs.
A group of Wall Street firms that lent hundreds of millions of dollars to WeWork is exploring the possibility of a bankruptcy filing that could help the company exit from expensive office leases, one of several options under discussion, according to people familiar with the creditors’ talks.
AUGUST 12, 2023 — “GOING CONCERN LETTER” PRESAGES MAJOR PROBLEMS?
According to an SEC filing…
Item 1A. Risk Factors
Our losses and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern.
As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern over the next 12 months.
Our ability to continue as a going concern is contingent upon successful execution of our management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes, without limitation:
• Reducing rent and tenancy expense by taking additional restructuring actions and negotiating more favorable lease terms.
• Increasing revenue by reducing member churn and increasing new sales.
• Controlling expenses and limiting capital expenditures.
• Seeking additional capital through the issuance of debt or equity securities, or the sale of assets.
There can be no assurance that any such measures would be successful. If we are not successful in improving our liquidity position and the profitability of our operations, we may need to consider all strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code.
In addition, the perception that we may not be able to continue as a going concern may cause members, landlords and others to choose not to do business with us due to concerns about our ability to meet our contractual obligations.
If we seek additional financing to fund our operations and there remains substantial doubt about our ability to continue as a going concern, our financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.
In addition, if we issue in the future audited financial statements with an audit opinion that includes going concern or similar qualifications or exceptions, it could result in, among other things, an event of default under our Credit Agreement and indentures governing our secured notes, unless waived. The consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty. Such adjustments could be material.
JANUARY 23, 2023 — 300 LAYOFFS
WeWork plans to cut 300 employees globally as the coworking giant deals with dwindling cash reserves and the possibility of loan defaults.
The company is continuing with its efforts to optimize its real estate portfolio and streamline operations, resulting in a reduction in force of 300 employees in an effort to conserve cash.
NOVEMBER 10, 2022 — CLOSING 40 LOCATIONS
“The company has announced it is closing about 40 underperforming locations in the United States, with most closures scheduled for November 2022, in an attempt to become profitable.
OCTOBER 9, 2019 — 500 INFORMATION TECHNOLOGY JOBS IN AT RISK
According to a published report,”WeWork expects to shed about 500 of the roughly 1,500 software engineers, product managers and data scientists employed in the company’s technology division as a result of layoffs and selling businesses.”
OCTOBER 4, 2019 — WEWORK PLANNING TO LAYOFF UP TO 3000 EMPLOYEES IN TURNAROUND EFFORT.
WeWork co-founder Adam Neumann has relinquished control over the company’s operations to new co-CEOs Artie Minson and Sebastian Gunningham who are moving fast to attempt a turnaround.
This includes the divestment of non-core businesses and the company’s $60 million Gulfstream G650.
The company has indicated that it will cut between 10% and 25% of its existing workforce which is estimated to number approximately 12,500 employees. Expect cuts of 1,000 to 2,000 employees.
SEPTEMBER 28, 2019 — WEWORK CRATERS — TALK OF BANKRUPTCY AND REORGANIZATION
Within weeks of being touted as having a $47 billion valuation, the CEO has been forced out of the company and there is talk of a Chapter 11 reorganization.
A highly critical media pointed out that the CEO was engaged in extreme self-dealing, gross mismanagement, and what some characterize as bizarre behavior.
This does not bode well for employees.
SEPTEMBER 21, 2019 — Original post…
New York, New York-based The We Company (WeWork), a real estate company that provides shared workspaces for technology startups, and services for other enterprises, has suffered a disastrous pre-IPO [Initial Public Offering] roll-out. Starting with fact that the company is more like a REIT (Real Estate Investment Trust) offering temporary office rentals with shared facilities like conference rooms, answering services, mail delivery, computer access, etc., than a technology company. From their Securities and Exchange filing, it appears that the company is centered around the whims of its CEO and major owner and that, in addition to an outrageous valuation, the company seems rife with self-dealing and financial shenanigans.
It is being suggested that before the company is offered to the public, the company should be restructured, closing and selling off all non-core businesses, reducing the employee headcount, and most of all, replacing their dodgy management with qualified individuals with real estate business experience. Perhaps even earning a profit or breaking even before it refiles IPO documents.
Just reading the “Risk Factors” section of their SEC S1 filing should scare most current and potential employees.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?