WeWork, the high-flying co-working space announces bankruptcy

WeWork, a shared office space company and one of the most valuable startups in the world filed for bankruptcy on Monday following years of declining financial performance.

After years of worsening financial performance, WeWork, the formerly highly successful shared office space company and one of the most valuable startups in the world, filed for bankruptcy on Monday.

WeWork's demise completes an astonishing fall for a business that was valued at $47 billion at the beginning of 2019 following a deluge of venture capital funding from Goldman Sachs, BlackRock, Japan's Softbank, and other major investors. With time, the company's operating costs skyrocketed, and it became dependent on frequent funding infusions from individual investors.

WeWork leases buildings and partitions them into offices that its members — small companies, startups, and independent contractors — may sublease in order to avoid paying for fixed office space. But when mandated COVID lockdowns were implemented, millions of Americans switched to remote work and stopped needing office space; therefore, the corporation faced immediate challenges.

In a statement announcing the bankruptcy case, WeWork stated that its workspaces are "open and operational."

WeWork issued a warning in August that the company might not be able to continue for the next year due to a number of reasons, including cash flow issues and financial losses. The business also stated that it has a high member turnover rate.

Adam Neumann, the former CEO and creator of WeWork, founded the business in April 2011.