Wework is gambling for its survival by renegotiating its office leases

Wework claims it has reduced its future hire commitments by more than 40%. This represents a savings of more than $8 billion.

American experts Wework shared offices Announcing that it had managed to renegotiate dozens of commercial leases and terminated others, the move was considered a turning point towards the company’s sustainability. According to a press release, between the renegotiation and exiting the lease, WeWork claims to have reduced its future rent commitments by more than 40%, representing a savings of more than $8 billion.

WeWork files for bankruptcy - 07/11
WeWork files for bankruptcy – 07/11

The company announced in early September that it had begun discussions with a view to revising the terms of “almost all” of its leases, believing “(its) ability to continue to grow (…) There is sufficient doubt about “its activities”. But it did not allow How to avoid filing for bankruptcy for WeworkEarly November.

“With a significant reduction in upcoming rental expenses and improvements in operating efficiency, WeWork is positioned to achieve strong and sustainable financial performance,” the company said.

reduce your debt

Additionally, as part of its restructuring, WeWork says it has managed to reduce its debt by more than $3 billion following verification of the restructuring plan by the majority of its bond creditors. “We have come a long way on our path to a strong and sustainable WeWork,” commented CEO David Tolley, quoted in the press release.

“We are committed to completing this restructuring at the end of this quarter,” said the manager, who specified that at the end of the process, WeWork will have “little or no debt”.

The group says it manages approximately 1.8 million square meters of offices in more than twenty countries. After years of displaying tepid growth, WeWork saw its model shaken by the Covid pandemic The emergence of teleworking, The episode further increased the apprehensions of investors, who were already concerned about the start-up’s lack of profitability as well. Mistakes of Boss and Co-Founder, Adam NewmanLanded in 2019.

Adam Neumann recently made headlines again by submitting a proposal to buy WeWork for $500 million. At its peak, in early 2019, the group was worth up to $47 billion.

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