A leader in coworking spaces, WeWork experienced a quick rise in popularity, with many entrepreneurs, freelancers, and creative self-employed individuals seeking shared workspaces. Yet, a sudden decline at the end of last year saw WeWork file for Chapter 11 bankruptcy protection. However, the company announced its emergence from bankruptcy last week, accompanied by news of its new leadership.
In 2019, WeWork was valued at $47 billion, proving itself a global leader in flexible workspace providers. The company aimed to expand on the traditional real estate business model by transforming the spaces in which people work, offering a chic atmosphere with fewer distractions. It functions by refurbishing and renting office spaces to individuals seeking a more structured workspace that decreases distractions and increases productivity.
Yet, the end of 2023 had WeWork’s value plummeting to a mere $45 million, with shares of their stocks falling more than 98% from the start of the year. By November, WeWork had filed for Chapter 11 bankruptcy protection in both the U.S. and Canada, with the goal of negotiating more than a 40% reduction in rent commitments from landlords. According to WeWork’s global head of real estate, Peter Greenspan, the lease negotiations would support the company in exiting bankruptcy as a leaner business, better able to continue providing coworking spaces that benefit both employers and landlords.
On June 11, 2024, the company announced it had successfully completed its global operational and financial restructuring. Working as interim CEO in May 2023 before assuming the permanent role in October, David Tolley’s brief tenure at WeWork saw the company through the negotiation of more than 190 leases and exiting more than 170 “unprofitable” locations, according to the company’s press release.
The downsizing of the company’s real estate portfolio helped reduce its annual rent and tenancy expenses by more than $800 million. The company also secured an additional $400 million in equity capital. Its portfolio now includes roughly 45 million square feet throughout its 600 locations across 37 countries.
Along with its emergence announcement, WeWork also announced that John Santora would be replacing Tolley as CEO. Tolley stepped down after the company’s successful restructuring. Santora stated, “I am delighted to join WeWork at this exciting moment in the company’s history. Thanks to the tireless efforts of the entire organization, we are well-positioned to look optimistically to the future and to realize the incredible potential of this wonderful company.”
WeWork also announced a new board, which includes Anant Yardi, CEO of property management software company Yardi Systems. Yardi expressed, “While much has changed, we remain steadfastly committed to the core elements that make WeWork so special: our incredible community, our beautifully designed spaces, our innovative technology, our global scale, and our entrepreneurial spirit.”
Other new board members include Adnan Ahmad as advisor, Arnie Brier as senior vice president and general counsel, and Jason Yardi as senior director of technology. Joining them are Daniel Erhmann, partner and head of restructuring at King Street, and Jagannath Iyer, partner at Softbank Investment Advisers.
