According to the sources, the troubled office-sharing company WeWork will begin closing some of its buildings around the globe.
The company, has seen its shares tumble following allegations it could file for bankruptcy as early as next week. WeWork would not confirm precisely how many locations would close in the United Kingdom.
It did state, however, that one of its central London buildings adjacent to Blackfriars station will be closed.
This action would have to be a component of the business's "our previously-announced goal to increase liquidity and strengthen our balance sheet," which the company stated would be the result of this step.
Members of WeWork who were located in the Southbank building in London said that the firm emailed them and informed them that it was closing "unprofitable" sites.
They reported that they were told to vacate the building by November 30 and that WeWork promised to find them alternative workplace solutions.
It occurs as the company challenges financially. It informed the US financial regulator on Tuesday that it had reached an agreement with creditors to temporarily postpone payments for a portion of its debt.
As a result of accelerated expansion, rising interest rates, a failed attempt to sell shares to the public, and the departure of the company's co-founder, sources have learned that the company will seek to renegotiate a number of its leases not only in the United Kingdom, but also around the globe.
WeWork stated in a statement that it was "completely committed" to the United Kingdom and Ireland, but declined to comment on rumors that it would file for Chapter 11 bankruptcy in the United States.
At the end of June, the company had over 690 locations in 39 countries worldwide.
Since its initial attempt to sell shares on the stock market in 2019 failed due to concerns about its debts, losses, and management, the New York-based company has been struggling.
Adam Neumann resigned as chief executive officer one week prior to the company's confirmation that its share sale had been canceled. The company stated that scrutiny of his leadership had become a significant diversion.
A few months after the listing scandal, the pandemic struck, igniting a revolution in remote work and exposing WeWork to public criticism from tenants seeking to break their leases. However, the company continued to operate as executives sold off some businesses, eliminated employment, and canceled or modified hundreds of leases in an attempt to stem the firm's losses before the company ran out of money.
WeWork will ultimately list on the New York Stock Exchange in 2021 with a significantly lower valuation than anticipated.
SoftBank has invested tens of billions of dollars in WeWork despite the company's continuous losses.
The share price of the company has dropped by nearly 99 percent in the past year. WeWork expressed "substantial doubt" in August regarding its ability to continue operations.
The company stated in a statement at the time that it encountered challenges such as a decline in demand and a "difficult" operating environment.