WeWork files for Chapter 11 bankruptcy protection in US; India operations unaffected, says CEO Virwani
On 7 November 2023, WeWork filed for Chapter 11 bankruptcy protection in the United States. This came after years of struggling to find its footing, and was exacerbated by the COVID-19 pandemic, which led to a decline in demand for shared office space.
WeWork was once valued at $47 billion, but its share price plummeted in 2023 after it was revealed that the company had exaggerated its profitability and was facing a mountain of debt. In August 2023, WeWork announced that it was considering bankruptcy, and it suspended trading of its shares.
The company’s bankruptcy filing is limited to its locations in the United States and Canada. WeWork has said that it intends to trim “non-operational” leases, and it has already requested the ability to reject the leases of certain locations.
WeWork’s insolvency is a blow to the co-working industry as a whole. It also raises questions about the future of the office market, as more and more people are choosing to work from home.
Also See: Chapter 7, 11, 13…all about US insolvency laws
Meanwhile, in light of recent developments about WeWork Global’s Chapter 11 filing news, Karan Virwani, CEO at WeWork India, issued please a statement clarifying the future of the India business.
Here’s the statement:
Today, WeWork Global has made the decision to initiate an important strategic reorganization process in the US, along with recognition proceedings in Canada. This is a step towards improving its business’ economics, and enabling them to continue delivering best-in-class services well into the future.
WeWork India operates independently of WeWork Global, and our operations will not be affected in any manner. It is a separate entity in itself, and we are not a part of this strategic reorganization process. The Chapter 11 filing does not impact the operations of the global entity as it continues to remain in possession of its business, operating as usual. The process restructures the debts and the leases of WeWork Global in the US and Canada. During this period, we will continue to hold the rights to use the brand name as part of the operating agreement, while serving our members, landlords, and partners as usual.
WeWork India is backed by majority stake holder Embassy Group, and is committed to investing in the future of our business. We remain fully focused on delivering exceptional and innovative flexible workspace solutions for our members in the region. We are the leaders in the flexible workspace industry and have transformed the way India works. WeWork India has been profitable since 2021, and we are committed to the robust growth and success of the business and the industry.
WeWork India is a separate entity from WeWork Global. The recent news around the potential bankruptcy and Chapter 11 filing in the US will have no impact on the members and stakeholders in India. Any development globally has no bearing on the operations of the business. In India, we will continue to operate and serve our members, landlords, and partners as usual.
We are backed by the Embassy Group which holds the majority stake and control to run and operate the business in India. We have achieved consistent and sustainable growth, operationally and financially. WeWork India is the leader in the flexible workspace industry and has transformed the way India works. We are committed to the robust growth and success of the business and the industry.
