Co-working giant WeWork files for bankruptcy in the US

WeWork has filed for bankruptcy in the US, a move that follows years of struggle for the co-working company.

The firm reported liabilities of $10bn to $50bn (£40.5bn), according to a bankruptcy filing in the New Jersey federal court.

The filing gives WeWork legal protection from its creditors and more tools for negotiations with landlords.

WeWork, known for renting on flexible terms to start-ups and freelancers, was once seen as the future of the office.

But it relied on rapid growth to mask its steep costs.

“WeWork Inc. and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code, and intend to file recognition proceedings in Canada,” the firm said in a statement.

WeWork chief executive David Tolley said he was “deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement”

“We remain committed to investing in our products, services, and world-class team of employees to support our community,” he added.

Demand for co-sharing office spaces by WeWork was hit after a disastrous 2019 effort to raise money in a public listing hurt its reputation and led to the ousting of its co-founder Adam Neumann.

That was swiftly followed by pandemic which led to many office closures around the world, with people having to work from home.

In the first half of this year, WeWork lost more than $1bn, weighed down by the expense of operating its offices, as well as other costs.

The company has been scrambling to sell off parts of its business and pushing to shut locations or renegotiate the terms of long-term leases and debts.

Last month, as those discussions intensified, WeWork told investors it was not making payments on its loans.

Founded in 2010, WeWork claimed in June this year to have more than 700 locations around the world and about 730,000 members.

Investors privately valued the firm at some $47bn at its height in early 2019.