WeWork, which is the biggest tenant in New York and one of the largest in London, is halting all new lease agreements with property owners, according to reports.
The decision effectively means WeWork’s expansion is coming to an end for the time being, which will no doubt rattle commercial property owners across the globe.
The move to suspend new leases comes as We Company is planning to lay-off thousands of its 12,000-plus employees, including some with close ties to co-founder and ex-CEO Adam Neumann.
Neumann relinquished his top role on Tuesday following a plunge in the company’s estimated valuation and a clash with investors, although he will stay on as We Company’s non-executive chairman.
Under Neumann’s leadership, We Company has been preparing for an initial public offering (IPO) but has postponed the float plans due to questions about the company’s corporate governance and valuation.
The New York-based company lost more than $900 million in the first half of 2019, up 25% from a year earlier, even as its revenue doubled to $1.54 billion, as it burned through cash to expand.
That said, the fate of the company’s IPO remains uncertain.
We Company is now mulling whether to slash the valuation of the IPO to a little over $20 billion, less than half of the $47 billion valuation pegged in January, according to Reuters.
Moreover, some analysts think that it is unlikely the company will even do an IPO this year as it grapples with questions about the viability of its business model.
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