5 reasons behind the WeWork bankruptcy rumours

In summary, WeWork’s business model faced doubts and challenges arising from its concept, economic factors, the pandemic, expansion strategy, and its Failed IPO, all of which contributed to its precarious situation.

WeWork faced significant challenges and was in danger due to several key factors:

1. Concept and Cost: WeWork‘s coworking concept wasn’t novel, and its pricing was often higher than competitors. This made it less attractive to potential customers who sought cost-effective alternatives.
   
2. Economic Factors: High-interest rates discouraged entrepreneurial activity, including investment from venture capitalists. This economic climate hindered WeWork’s growth prospects.
   
3. Pandemic Impact: The COVID-19 pandemic accelerated the shift to remote work, reducing demand for physical office spaces. WeWork struggled to adapt to this new landscape and faced increased competition from remote work solutions.
   
4. Risky Expansion: WeWork pursued aggressive expansion strategies, leading to high fixed costs. This approach left them vulnerable when revenue didn’t match their cost structure.
   
5. Failed IPO: WeWork’s plan to go public faced significant setbacks, resulting in a sharp decline in its valuation. This eroded investor confidence and raised concerns about the company’s long-term sustainability.

About wework

WeWork is a global provider of flexible office space and co-working solutions. They offer a range of workspace options to meet the needs of businesses, including traditional office spaces, shared workspaces

resource

• WeWork warns it might go out of business
• https://www.theguardian.com/business/2019/dec/20/why-wework-went-wrong
• WeWork share price crash