WeWork Will Close 40 US Locations In Struggle To Fill Offices

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by Tyler Durden
Thursday, Nov 10, 2022 - 06:40 PM

Office-leasing company, WeWork Inc., which still manages to survive, after a failed 2019 IPO and then a collapse in valuation, went public via a SPAC merger with BowX Acquisition last year. Shares in the company are down more than 70% on the year. With the latest news, the company struggles to fill office spaces. 

On Thursday, WeWork announced 40 US "underperforming" office locations, or approximately 41,000 workstations, will be mostly closed by the end of the month.  

The closures come as the co-working company missed Wall Street's expectations in the third quarter. The company is miserably failing at the return-to-office push. 

It reported $817 million in sales for the quarter, missing Bloomberg analysts' estimates. The company is a money pit, losing $629 million, compared with an average estimate of $367 million. 

WeWork is still trying to shrink its real estate footprint and cut headcount as it grapples with long-term lease obligations of $15.57 billion as of September. 

"These closures are expected to reduce top-line revenue; however, they are expected to also reduce rent, tenancy and building operating expenses, and, once fully implemented, are expected to contribute approximately $140 million to annual Adjusted EBITDA," the company said. 

WeWork shares are down more than 15% on the session, honing in on a new all-time-low. 

The company did not disclose which US office buildings it would exit.