WeWork says working with landlords to renegotiate all leases

WeWork CEO David Tolley said in a letter posted to the company’s website that, “Following a period of unsustainable hypergrowth, WeWork has been on a years-long transformation to resize our cost structure, grow sustainable revenue and strengthen our balance sheet. All this while navigating a global pandemic. As I shared a few weeks ago, despite the important actions we‘ve taken over time to improve our company and real estate footprint, our 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… Today, we are kicking off a process of global engagement with our landlords to renegotiate nearly all our leases. We will seek to negotiate terms with our landlords that allow WeWork to maintain our unmatched quality of service and global network, in a financially sustainable manner. As part of these negotiations, we expect to exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product. This process has no impact on our commitment to delivering for our members and, for the most part, we expect no changes to our day-to-day operations.”