WeWork, the coworking space company that was once the largest single non-government tenant of D.C. region office space, has warned of “substantial doubt” about the company’s ability to continue.
The company cited its ongoing losses and cash need, combined with increased member churn and current liquidity levels, as concerns.
WeWork operated 21 coworking spaces in the D.C. region at its peak in 2019. Closures that began with the pandemic have trimmed WeWork locations around the area to just 11.
The New York-based company said its ability to stay in business is contingent on reducing rent and tenant costs by negotiating new lease terms, increasing revenue by reducing member loss and controlling costs by limiting spending and securing new capital, all within the next 12 months.
WeWork went public on the New York Stock Exchange in 2021. Doubts about its ability to stay in business sent its shares down sharply in Wednesday trading.
WeWork once had a market capitalization value of $47 billion. Its market value is now less than $447 million. WeWork stock has lost more than 85% of its value since the start of 2023.
WeWork did trim its losses last quarter, reporting a net loss of $397 million, down from a net loss of $635 million in the same quarter a year ago. Occupancy by its coworking tenants was 72%, a slight improvement from 70% in the second quarter of 2022, though physical memberships were down.
“The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimization efforts, and maintaining a disciplined approach to reducing operating costs,” said interim chief executive David Tolley.
Tolley is currently serving as CEO after Sandeep Mathrani stepped down in May.
