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the company with nine lives


The office space company WeWork filed for bankruptcy this week. But it isn’t the first time the company has been in difficult financial straits. FT Edit asked Elaine Moore, who has followed the co-working company for years, to give us her inside take.

WeWork’s spectacular life cycle spans a $47bn valuation, collapse, revival and now bankruptcy. True to form, the office leasing company is spinning its latest failure as an opportunity. 

The US company’s original idea of turning offices into attractive, appealing spaces was a good one. Why should workplaces have grim lighting and boring grey carpets? In the 2010s, it tore through cities, signing eye-catching deals. But its ambition to be a tech company never rang true. What WeWork called a physical social network was really just a desk leasing business.   

That’s why I wrote a story in 2018 questioning the company’s valuation. It made no sense that WeWork should be considered a completely new sort of company when European firm IWG has been providing something very similar since the 1990s.

Yes, WeWork was cooler but its losses were breathtaking. A year later, its botched attempt at an initial public offering led to the exit of founder Adam Neumann and a more sober company emerged. However, the basic problem of the business remained. WeWork entered into expensive long leases with building owners, refurbished the space, then offered it to tenants on short-term leases. The mismatch became difficult to manage when desks went empty, as they did during the pandemic.  

On Monday, WeWork filed for Chapter 11 bankruptcy protection. The company has negotiated with many of its biggest creditors. It is time, says new chief executive David Tolley, to “pull the future forward”.

Post-bankruptcy we will find out if WeWork’s third iteration can make money. It could sign shorter leases, raise member prices and jettison a big chunk of its US portfolio, leaving international deals intact. Offering flexible office space can be a viable business. After all, IWG has been doing it for more than three decades. 

Elaine Moore is deputy editor of Lex, the FT’s business and finance column

Coming up next week

The FT’s coverage of the Gaza war continues next week with two deep pieces of reporting. Guy Chazan travelled to the battlefield with the Israeli forces fighting Hamas for a first-person account of the devastation. And we will look at the political argument that has already broken out over what happens after the war. Will Israeli troops stay? Will there be international peacekeepers? Does anyone have a plan?

Our favourite pieces

It is now just over two years since the US withdrew from Afghanistan, leaving the Taliban in control, and these days there is very little Western reporting about the country. But this article, from the Pakistan-Afghanistan border was striking; more than 200,000 Afghans who have been living in Pakistan without visas are being forced to return to the country, despite fears for their safety.
Malcolm Moore (@malcolmmoore)
Editor, FT Edit

I loved Janan Ganesh on why young people should go into the office — and so did you. It was one of our most-read pieces of the week on FT Edit. Full of pin-sharp insights on the complexities, nuances and unwritten rules of these weird places, it took me straight back to my early, pre-Pandemic working life . . . in both good ways and bad.
Hannah Rock
Deputy editor, FT Edit (@HannahRockFT)

One of the most interesting interviews this week was Henry Mance’s conversation with Susan Nieman, a philosopher who describes herself as a Jewish universalist. She says German support for Israel is unequivocal ‘right or wrong’ because they don’t want to be Nazis. And she complains that the Black Lives Matter movement morphed into a tribalist movement. Ultimately, she warns that liberals and leftists are missing the plot by arguing with each other.
Caryn Wilson
US editor, FT Edit (@CarynAWilson)

Our favourite fact of the week …

Donald Trump might yet win a presidential election. One reason why is that close to 70 per cent of people who identify as Republicans say they believe his lies. From A Trump win would change the world

Something to listen to

Life and Art — The FT’s new weekend podcast is here, and the first episode asks if we are all taking too many holidays in Greece.

Unhedged — Rising interest rates means the cost of borrowing money is increasing sharply for the US government. In October, it was paying interest at an annualised rate of $1trn. The FT’s markets podcast looks at what impact this may have on the economy.

Working It — The FT’s Working Life podcast looks at how ADHD manifests in the workplace, and how businesses can improve their management of employees with ADHD.

Something to watch

The creator economy is worth about $250bn, says Goldman Sachs. But after a peak in the pandemic, advertising revenue is starting to slow down and funding for creators has dropped significantly. What does their future hold?

Talk to us

We love feedback. Let us know what themes you’re curious about and what features you want to see. Email us at ftedit@ft.com.





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