The US’s office collapse may soon claim its first victim.
From WeWork’s second-quarter earnings release, with our emphasis:
In addition, as disclosed in WeWork’s Quarterly Report for the three and six months ended June 30, 2023 (the “Second Quarter 10-Q”), as a result of the Company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve liquidity and profitability over the next 12 months, which includes, without limitation:
•Reducing rent and tenancy costs via restructuring actions and negotiation of more favourable lease terms;
•Increasing revenue by reducing member churn and increasing new sales;
•Controlling expenses and limiting capital expenditures; and
•Seeking additional capital via issuance of debt or equity securities or asset sales.
This follows the resignation of Sandeep Mathrani, the company’s CEO and Chair, after dismal first-quarter results in May. And its CFO and Treasurer. Also a handful of board members.