WeWork begins to renegotiate leases globally, plans to exit ‘unfit’ locations

WeWork said on Wednesday (Sep 6) that it has started a process of global engagement with landlords to renegotiate nearly all its leases.

The SoftBank-backed company said it sought to negotiate favourable terms with its landlords and plans to “exit unfit and underperforming locations” in order to reinvest in its other assets.

“We intend to remain in the majority of our buildings and markets,” it said in a statement.

The company had reported a 3 per cent drop in total physical memberships from a year earlier, citing increasing competition, macroeconomic volatility and softer demand than anticipated.

WeWork, which provides flexible workspaces by taking out long-term leases and renting them out for short durations, gained popularity before the COVID-19 pandemic made shared office spaces less appealing.

The company, which has struggled with heavy debts and poor financial performance, hired advisers for its restructuring efforts, Bloomberg News reported last month.

Last year, it launched a series of steps to save cash, like exiting locations, cutting jobs, striking a deal to cut debt by about US$1.5 billion and extending the date of some maturities.

CNA has contacted WeWork for more information.