WeWork reportedly filing for bankruptcy and Canadian locations' future uncertain

Co-working company WeWork could file for bankruptcy as early as next week, according to several reports.

Bloomberg sources, who chose not to be identified, said the company is considering seeking Chapter 11 protection in New Jersey.

The New York-based company has several locations across Canada. WeWork, which is backed by investment holding company SoftBank Group, was once valued at US$47 billion in 2019 but now "struggles with a massive debt pile and hefty losses," reports Reuters.

The Wall Street Journal was the first to report the news about the bankruptcy on October 31, and since then, shares for the flexible office space have dropped by 37 per cent. This year, shares have already dropped 96 per cent.

We have reached out to the company for a comment and to ask how the news will affect its Canadian operations but have yet to receive a response. A WeWork spokesperson told CNN that the company would "not comment on 'speculation.'"

In early October, the company said it wouldn't be able to make two sets of interest payments of over US$95 million. On Tuesday, the company received a 30-day grace period agreement with creditors to make payments on some of its debts due to expire this week.

The news shouldn't come as a surprise for those who have been following the company's ongoing financial struggles.

WeWork's 2023 second-quarter earnings report stated, "As a result of the Company's losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company's ability to continue as a going concern."

The company saw revenues of US$844 million in the second quarter, representing an increase of 4 per cent year-over-year, but a net loss of nearly US$400 million compared to US$635 million in the second quarter of 2022.

-With files from Kenneth Chan