WeWork is reviewing about 100 leases around the globe and could pull out of some of them as it works to stem its losses, the company confirmed after a report in The Information on Thursday.
The embattled co-working start-up could unravel leases it signed on up to 100 buildings, which comprises 10% to 15% of its global office leases, according to the Information. It’s unclear how many offices the company will ultimately exit based on the review.
The move could lead to additional layoffs at the company, the Information said. Last month, WeWork cut 2,400 jobs, or 19% of its total workforce, which amounted to 12,500 employees as of June 30, according to an SEC filing.
WeWork’s efforts to cut costs and achieve profitability have ramped up considerably since SoftBank announced it would take control of the company in October. Before SoftBank’s rescue deal, WeWork was poised to run out of cash and its IPO prospectus, released in August, provided a picture of the cash-strapped company’s finances, including a $900 million loss in the first six months of 2019 and long-term lease obligations of $17.9 billion. The company ultimately postponed its IPO.
In a November presentation to investors, SoftBank CEO Masayoshi Son cited some of the issues with WeWork’s expensive leases, as part of a discussion on how to turn around the co-working company. Son said WeWork would need to stop building new offices for about three to four years, as well as divest some of its loss-making side ventures.
A WeWork spokesperson said the leases are being looked at as part of a broader review of the company’s global operations.
“As part of our plan to deliver profitable growth, we have said we are conducting an in-depth review of operations and assets globally in order to improve performance and best optimize our real estate portfolio,” the spokesperson said. “As we work through this process, serving our members remains our highest priority and only a small number of open locations may be subject to any change.”
Clarification: This story has been updated to reflect the fact that WeWork has made no decision on how many, if any, leases it will try to get out of.