WeWork says ‘substantial doubt’ it can stay in business

US-based firm says ability to stay afloat depends on boosting liquidity and profitability over next year.

WeWork, the workspace-sharing company, has expressed “substantial” doubt about its ability to stay in business amid steep losses and a shortage of cash.

The firm, whose headquarters are in New York, United States, said on Tuesday that its ability to stay afloat would depend on whether it can boost its liquidity and profitability over the coming year.

WeWork’s shares plunged by 27 percent following the comments

WeWork, which was once valued at $47bn, has been hard hit by the difficult conditions in the tech sector, which has seen tens of thousands of layoffs over the past year.

The company has not turned a profit since going public in October 2021, after a failed first attempt two years earlier. The failed initial public offering led to a rescue package that passed control of the company to Japanese tech giant SoftBank and pushed out co-founder Adam Neumann, whose exorbitant spending and erratic behaviour had turned off investors.

The company has seen further turmoil in recent months with the resignations of top executives, including CEO Sandeep Mathrani and CFO Andre Fernandez.

In March, WeWork reached deals to slash its debt by about $1.5bn and extend the date of some maturities in an effort to hang onto much-needed cash.

WeWork’s interim CEO, David Tolley, on Tuesday sounded an optimistic note despite the company’s losses of $349m during the second quarter.

“The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimisation efforts and maintaining a disciplined approach to reducing operating costs,” Tolley said.