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WeWork's Fall from Grace

Reading time: 7 minute(s)

WeWork, once the epitome of the sharing economy, has filed for bankruptcy, marking a downfall for a company that was once valued at a staggering $47 billion. 


At its peak, WeWork was hailed as a revolutionary force in the workspace industry, providing stylish and flexible offices for entrepreneurs, startups, and freelancers. The company's co-founder, Adam Neumann, embodied the Silicon Valley spirit of disruption and innovation, captivating investors with his vision of transforming the way people worked.

However, beneath the success, WeWork's foundations were crumbling. The company was haemorrhaging money, burning through cash at an alarming rate to fuel its expansion. Its business model, reliant on long-term leases and short-term rentals, was inherently unsustainable, leaving WeWork vulnerable to economic fluctuations.

Neumann's leadership style, characterised by extravagance and a disregard for corporate governance, further exacerbated the company's problems. His lavish spending and questionable decisions raised eyebrows among investors, leading to a growing sense of unease about WeWork's future.

The company's IPO in 2019 was meant to be its crowning achievement, but it instead proved to be a catalyst for its downfall. As investors scrutinised WeWork's financial statements, doubts about the company's viability intensified. The stock price plummeted, and Neumann was ousted as CEO, leaving WeWork in disarray.

The COVID-19 pandemic delivered the final blow to WeWork's already precarious situation. As businesses shifted to remote work arrangements, demand for coworking space evaporated. The company's revenue plummeted, and its debt burden became overwhelming.

WeWork's bankruptcy filing is a cautionary tale for businesses of all sizes. It highlights the risks of unchecked growth, the importance of good financial management, and the need for strong leadership. The company's spectacular rise and fall serve as a stark reminder that even the most promising ventures can crumble when ambition outpaces prudence. Let's delve into the details of what led to this point.

What is WeWork? 

WeWork is an American company that provides shared workspace, community, and services for entrepreneurs, freelancers, startups, and small businesses. WeWork was founded in New York City in 2010 by Adam Neumann and Miguel McKelvey. The company has since grown to over 779 locations in 39 countries around the world.

How did WeWork become successful?

WeWork’s rise to success can be attributed to a number of factors that aligned with the evolving workplace landscape in the 2010s. 

The company emerged at a time when the coworking industry was experiencing explosive growth, driven by the surge of freelancers, remote workers, and startups seeking flexible and affordable workspaces. WeWork capitalised on this trend by establishing itself as a leading provider of these spaces, catering to a diverse clientele seeking a collaborative and community-driven work environment. It transformed traditional office spaces into vibrant hubs, offering amenities and services that went beyond the basics. 

From fully furnished workspaces to free food and drinks, conference rooms, and networking events, WeWork aimed to create a work environment that was more than just a place to sit and type. This focus on fostering a sense of community and belonging resonated strongly with its target audience.

WeWork's aggressive expansion strategy, fueled by substantial venture capital funding, allowed it to rapidly expand its presence across major cities worldwide. This expansion strategy, coupled with its innovative approach to coworking, further cemented its position as a market leader.

Adam Neumann and his team masterfully crafted a brand narrative that resonated with its target audience of young, ambitious professionals. The company's marketing campaigns were often unconventional and attention-grabbing, emphasising the innovative spirit, entrepreneurial spirit, and community-driven nature of WeWork. This branding helped to elevate the company's image and attract new members.

The economic climate of the early 2010s, characterised by a period of economic growth and rising disposable incomes, provided a favourable backdrop for WeWork's success. This favourable economic climate made it more appealing for individuals and businesses to consider coworking spaces as a viable option.

According to WeWork's financial statements, the company's revenue in the first 10 years of operation (2010-2019) was approximately $8.3 billion. Here's a breakdown of their revenue by year:

  • 2010: $1 million
  • 2011: $3 million
  • 2012: $21 million
  • 2013: $106 million
  • 2014: $25 million
  • 2015: $185 million
  • 2016: $436 million
  • 2017: $886 million
  • 2018: $1.82 billion
  • 2019: $3.46 billion
  • 2020: $3.42 billion
  • 2021: $2.57 billion
  • 2022: $3.25 billion

So what led to the company filing for bankruptcy?

What led to WeWork’s bankruptcy?

WeWork filed for bankruptcy on November 6, 2023, due to a combination of factors, including:

  • High debt: WeWork had a large amount of debt, which was exacerbated by the company's rapid growth. The company's debt was estimated to be around  a staggering $10 billion at the time of its bankruptcy filing.
  • Unsustainable business model: WeWork's business model was based on signing long-term leases for office space and then subletting that space to its members on shorter-term leases. This model was unsustainable because WeWork often had to pay more for its leases than it could charge its members.
  • Mismanagement: WeWork was plagued by mismanagement, particularly under the leadership of its co-founder, Adam Neumann. Neumann was known for his extravagant spending and his lack of focus on profitability.
  • COVID-19 pandemic: The COVID-19 pandemic had a devastating impact on WeWork's business. As more people began working from home, demand for coworking space plummeted.

A ccording to Investopedia,WeWork lost $26.1m per day in capital value, one of the fastest destructions in capital value in corporate history. 

The company said late on Monday 06, November 2023  it had struck an agreement with nearly all of its creditors to convert $3bn of existing loans and bonds into equity in the reorganised company. 

For those who are not aware, the Chapter 11 process in the US allows WeWork to terminate leases early with little financial penalty as it seeks to restructure its more than $13bn in lease obligations. 

WeWork chief executive David Tolley said the process would focus on “addressing our legacy leases and dramatically improving our balance sheet”. 

In its bankruptcy filing with a federal court in New Jersey, WeWork requested to give up 69 leases, saying that rationalising its office portfolio was “critical” to its restructuring. 

The company has been in “active negotiations” with more than 400 landlords to improve lease terms, according to the filing. WeWork claims that its office spaces are “open and operational” as normal, and its international business outside the US and Canada was unaffected by the bankruptcy filing.

WeWork's filing will give it protection from its creditors and landlords as it restructures its vast debts. Based on its latest share price, WeWork is now worth less than $50m.

What does WeWork Offer?

WeWork offers a variety of workspace solutions to meet the needs of its members. These solutions include:

  • Coworking spaces are shared workspaces where members can rent a desk or office for a day, month, or year. Coworking spaces typically have a variety of amenities, such as high-speed internet, printing and copying services, and coffee and tea.
  • Private offices are private workspaces that can be rented by individuals or teams. Private offices typically have more privacy and security than coworking spaces.
  • Meeting rooms can be rented by the hour for meetings, conferences, and training sessions.
  •  Event space can be rented by the hour or day for events such as product launches, parties, and workshops.
  • A variety of events and programs to help its members connect with each other. These events and programs include networking events, happy hours, and workshops.
  • Access to a variety of technology tools and services, such as high-speed internet, printing and copying services, and video conferencing.
  • A variety of support services, such as on-site staff, customer service, and technical support.


How much does WeWork cost?

WeWork's pricing varies depending on the location, the type of workspace, and the length of the membership. For example, a coworking desk in New York City typically costs around $450 per month, while a private office in San Francisco typically costs around $1,000 per month. So pricing is different all over the world. 

Who uses WeWork?

WeWork's members include a variety of individuals and businesses, including:

  • Entrepreneurs: Entrepreneurs use WeWork to get access to a professional workspace, community, and services.
  • Freelancers: Freelancers use WeWork to get access to a professional workspace, high-speed internet, and printing and copying services.
  • Startups: Startups use WeWork to get access to a professional workspace, community, and services, as well as to scale their businesses.
  • Small businesses: Small businesses use WeWork to get access to a professional workspace, community, and services, as well as to reduce their overhead costs.

WeWork has been praised for its innovative approach to workspace and its focus on community. However, the company has also been criticised for its high prices and its aggressive growth strategy.

Final Thoughts

The company's innovative approach to coworking captured the imagination of entrepreneurs and businesses worldwide, but its rapid growth and unsustainable business model ultimately led to its downfall.

Despite its collapse, WeWork has left an indelible mark on the commercial real estate landscape. The company's emphasis on community, flexibility, and design has reshaped the way people think about workspaces. 

In the aftermath of WeWork's bankruptcy, the coworking industry is likely to undergo significant changes. Companies will need to adapt to a more cautious and discerning investor climate, placing greater emphasis on profitability and sustainable growth.

Written by

Eleana Ntagia

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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