Flexible office specialist WeWork has announced that it will be seeking to renegotiate nearly all of its leases around the world, a few weeks after the SoftBank-backed firm warned that there was ‘substantial doubt’ about its ability to continue as a going concern.
Writing a letter on the firm's "next phase", CEO David Tolley admitted that the current lease liabilities – which were over two-thirds of total operating expenses in the second quarter – 'still remain too high and are dramatically out of step with current market conditions'.
'We are taking immediate action to permanently fix our inflexible and high-cost lease portfolio,' he commented, adding that the firm is kicking off a process of global engagement with its landlords to renegotiate nearly all its leases.
'We will seek to negotiate terms with our landlords that allow WeWork to maintain its unmatched quality of service and global network, in a financially sustainable manner,' Tolley wrote.
As part of these negotiations, the New York-based firm expects to exit unfit and underperforming locations but said that it will remain in most of its buildings.
As of June, WeWork was in 777 locations in 39 countries.
WeWork has already spent several years seeking to cut its long-term lease liabilities, which exceeded $18 bn at the time Adam Neumann stepped down as chief executive after a failed initial attempt at going public in 2019.
