However, the firm still has an ugly balance sheet and continues to lose heaps of money, burning through an eye-watering US$650 million in just the past six months and reducing cash reserves to just US$205 million. WeWork has lost almost US$17 billion since it was founded more than a decade ago.
When WeWork finally went public in 2021, the hope was it would leave behind the excesses that were a hallmark of co-founder Adam Neumann’s leadership and become a serious flexible workspace provider for the work-from-home era. This week’s “going concern” warning included in the company’s second-quarter results suggests the next 12 months will every bit as fraught as WeWork’s near implosion four years ago. Absent effective remedial action or another capital raise, it could be lights out.
WeWork has terminated hundreds of real estate leases and slashed fixed costs and capital expenditures since its first disastrous attempt to go public in 2019; its workforce has shrunk by 70% and fripperies including the corporate Gulf Stream jet have been sold. A debt restructuring in March won additional breathing space by reducing its borrowings, lowering interest payments and extending maturities until 2027.
